The american recovery and reinvestment act

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Suppose the Stimulus package (The American Recovery and Reinvestment ACT of 2009) for $787 was allocated for spending in all 3 components of the AE model of Keynesian Macro model (RGDP = C+I+G); where they spent the bulk of it in G (government expenses for infrastructure), some of it in Tax rebates (-T), and the rest of it in the form of subsidies/credit in Private business investment (I). If the actual increase in RGDP was $2 trillion ($2,000 bullion), assuming other things stay the same, estimate the actual or real world effective multiplier.

Reference no: EM131083432

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