MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
8th Edition
ISBN: 9780134518312
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 32, Problem 2IAPA
To determine

To explain:

The effect of increase in expenditure on the highways and bridges would have on aggregate demand and real GDP.

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Suppose that the U.S. government increases its expenditure on highways and bridges by $100 billion. Explain the effect that this expenditure would have on aggregate demand and real GDP.
Consider an economy that is operating below the full-employment level of real GDP. What would be the effect of an increase in government spending on aggregate demand and real GDP?
Examine the following policies and determine which would decrease the level of aggregate demand.       Decreasing in government spending and decreasing taxes   Increasing investment and increasing government spending   Increasing consumption and decreasing taxes   Decreasing in government spending and increasing in taxes
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