What should be done to encourage people to spend more

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Reference no: EM1352097

Q. During hard times what could be done to encourage people to spend more so as to increase aggregate demand and invariably, create employment possibilities?

Q. For this hypothetical economy the current equilibrium level of output/income is £100 billion made up of Consumption £80 billion, savings £5 billion, taxation £5 billion and imports £10 billion. If the government decides to increase its expenditure by £10 billion what will be the new equlibrium level of output/income.

Reference no: EM1352097

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