By how much will aggregate demand at current prices shift

Reference no: EM13199207

Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with

a) A $60 billion increase in government purchases?

b) A $60 billion tax cut?

c) A $60 billion increase in income transfers?

What will the cumulative AD shift be for

d) The increased G?

e) The tax cut?

f) The increased transfers?

Reference no: EM13199207

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