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Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy.
Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with(a) A $50 billion increase in government purchases?(b) A $50 billion tax cuts?(c) A $50 billion increase in income transfer?