The federal government is considering some fiscal policy alternatives. Will its choice between the following pairs of policy changes influence the level of aggregate demand, and if so how? 1) A reduction in military procurement of 100 versus a reduction in scientific research of 100. 2) A reduction in mass transit programs of 100 versus a tax increase of 100.

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A: Answer; Multiplier = 1/(1 - MPC) = 1/(1-0.5) = 2

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A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

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Q: Shift the aggregate demand curve on the graph to show the impact of a tax hike. 130 120 Aggregate…

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A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…