Business, 11.12.2019 18:31 ahmedislife

Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. also assume that the economy’s multiplier is 4. instructions: enter your answers as whole numbers.
a. if household wealth falls by 5 percent because of declining house values, and the real interest rate falls by 2 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level?
the aggregate demand curve will by $ billion. in what direction and by how much will it eventually shift? the aggregate demand curve will by $ billion.

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Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household w...

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