Difference among government purchases and net tax

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Reference no: EM1356423

Determine whether each of the following, other things held constant, would lead to an increase, a decrease, or no change in long-run aggregate supply:

a. An improvement in technology

b. A permanent decrease in the size of the capital stock

c. An increase in the actual price level

d. An increase in the expected price level

e. A permanent increase in the size of the labor force

Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?

Reference no: EM1356423

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