Elucidate with aid of demand and supply curves

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Q. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $400 billion. If the MPC is .75, then what is the distance between N and L or by how much did government spending change? Please provide your calculation.

Q. Explain, with the aid of demand and supply curves, the impact of increased crime on the demand for private security services. On your diagram, show the changes in the equillibrium price and quantity.

Reference no: EM1351473

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