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    Principles of Economics
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    Exam 32: The Fed Model: Linking Interest Rates, Output, and Inflation
  5. Question
    Assume That a Negative Spending Shock of $68 Million Hits
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Assume That a Negative Spending Shock of $68 Million Hits

Question 82

Question 82

Essay

Assume that a negative spending shock of $68 million hits the economy. If the multiplier is 2, by how much will the IS curve shift and in what direction?

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