Crowding-out effects and the mpc

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Q1. Suppose that there are crowding-out effects and the MPC is .9. By how much must the government increase expenditures to shift the aggregate demand curve right by $10 billion?

Q2. Pick a real or fictitious business. Create a scenario around this business in which a manager would decide to either stop operations in the short-run or going out of business in the long-run. Provide a rationale with your response.

Q3. How would I find out by how much the price of water needs to be raised to reduce demand by 40% if the price of elasticity is 2.0?

Reference no: EM136732

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