Suppose that the government reduces spending on highway construction by $10 billion . Which way does the aggregate-demand curve shift? Explain why the shift might be larger or smaller than $10 billion.

Suppose that the government reduces spending on highway construction by $10 billion . Which way does the aggregate-demand curve shift? Explain why the shift might be larger or smaller than $10 billion.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section24.2: How Fiscal Policy Influences Aggregate Demand

Problem 2QQ

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