A small closed economy have the following characteristics
1.The equation of the aggregate expenditures line is: *
a.AE = 0.9 Y + 560
b.AE = 0.9 Y + 460
c.AE = 0.9 Y + 960
d.AE = 0.9 Y + 160
2.The government spending multiplier is: *
3.The slope of the aggregate expenditures curve of this economy is:
4.The Equilibrium is:
a.Y = 9,600
b.Y = 9,700
c.Y = 9,500
d.None of the above
5.Suppose potential GDP is equal to 12,000. By how much should government expenditures increase to reach potential GDP?
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