If the government purchases multiplier is 4 and a change in government spending leads to a $500 million decrease in aggregate dema

Question

If the government purchases multiplier is 4 and a change in government spending leads to a $500 million decrease in aggregate dema

Question

If the government purchases multiplier is 4 and a change in government spending leads to a $500 million decrease in aggregate demand, we can conclude that?

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Math High School Calantha 3 weeks 2023-01-19T22:03:23+00:00 2023-01-19T22:03:23+00:00 1 Answer 0 views 0

Answer ( 1 )

thnahdat · Answer 1 · 2023-01-19T22:04:39+00:00

thnahdat

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2023-01-19T22:04:39+00:00 January 19, 2023 at 10:04 pm

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The multiplier effect refers to the theory that government spending intended to stimulate the economy causes increases in private spending that additionally stimulates the economy.In essence,the theory is that government spending gives households additional income, which leads to increased consumer spending.