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Business, 05.05.2020 04:42 stephanie1105

Consider a hypothetical economy. Households spend $0.90 of each additional dollar they earn and save the remaining $0.10. The multiplier for this economy is.

Suppose government purchases, G, in this economy decrease by $200 billion. The decrease in G will lead to a decrease in income, generating a decrease in consumption that decreases income yet again, and so on.

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Consider a hypothetical economy. Households spend $0.90 of each additional dollar they earn and save...
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