Homework Help: Macroeconomics

Posted by Sarah on Thursday, May 29, 2008 at 6:57pm.

If the marginal propensity to consume is 2/3, and there is no investment accelerator or crowding out, what would happen to AD or AS, the price level (P) and the real GDP (Y) if government expenditures increases by $20 billion? Also show what happens graphically.

Macroeconomics - economyst, Friday, May 30, 2008 at 8:52am
Take a shot, what do you think. Hint, the government spending multiplier is 1/mps = 1/.33333 = 3.
Macroeconomics - Anonymous, Sunday, May 5, 2013 at 3:59pm
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