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Determining the equilibrium real output

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Reference no: EM132405612

1. A decrease in government purchases of $8 billion leads to an initial $4.4 billion decrease in withdrawals

a. In this case MPW is (.....), MPC is (.....), and the spending multiplier in this economy is (.....)

b. With this change in government purchases the AD curve shifts to the (left/ right).

c. As a result of this shift the equilibrium price level will (decrease/ increase) and the equilibrium real output will (decrease/ increase)

Thanks in advance!

Reference no: EM132405612

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