Refer to the previous question, in which households spend $0.60 of each additional dollar they earn and save the remaining $0.40. Suppose the government in this economy decides to increase government purchases (G) by $400 billion. The total change in demand resulting from the initial change in G is? [Hint: use the spending multiplier formula]
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Refer to the previous question, in which households spend $0.60 of each additional dollar they earn...
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