Essay
In each of the cases, use graphs of the Keynesian cross to show the impact of the change on aggregate expenditure and equilibrium GDP.
(a) The marginal propensity to consume rises.
(b) The government lowers spending.
(c) There is a fiscal policy reaction to an expectation of lower output in the future.
(d) There is a monetary policy reaction to an expectation of lower output in the future.
Correct Answer:
Verified
Correct Answer:
Verified
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