Question

Which component of GDP, (C, I, G, X, M) is influenced by each of the following...

  1. Which component of GDP, (C, I, G, X, M) is influenced by each of the following and which direction aggregate demand will shift?
  1. An decrease in the personal income tax rate
  2. An increase in the corporate tax rate
  3. An increase in government spending
  4. A decrease in government spending
  1. Calculate increases in real GDP in each of the following scenarios
  1. Government spending increases by $200,000 and the MPC is .75
  2. Consumption spending increases by $700,000 and the MPS is .3
  3. Investment spending increase by $3,000,000 and the multiplier is 3

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