Illustrate the effect of a decrease in autonomous net taxes

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1. Use the diagram for this exercise with the helping line to draw a level of aggregate expenditure that would lead to an economy at an equilibrium with a real GDP of $9 trillion. Illustrate the effect of an increase in government purchases of $200 billion when the marginal propensity to consume is 0.75

2. Use the diagram with the helping line to draw a level of aggregate expenditure that would lead to an economy at an equilibrium with a real GDP of $9 trillion. Illustrate the effect of a decrease in autonomous net taxes of $200 billion when the marginal propensity to consume is 0.75.

Reference no: EM131004174

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