9 Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the governmentincrease spending to shift the aggregate demand curve right by $10 billion?O $2 billionO $3 billionO $4 billionO $6 billionO $10 billionInfluential economists, like John Keynes, believed in "lean against the wind" policy because he felt that the governmentshould not use stabilization policy and simply let the economy "weather the storm."O TrueO FalseWage contracts can fix wages and therefore inflation reducesO nominal wages; this likely makes labor markets more flexible.O nominal wages; this likely makes labor markets less flexible.O real wages; this likely makes labor markets more flexible.O real wages; this likely makes labor markets less flexible.When considering the short-run, what does the Phillips curve shows thatO unemployment and inflation that arise in the short run as aggregate demand shifts the economy along the short-runaggregate supply curve.O unemployment and inflation that arise in the short run as short-run aggregate supply shifts the economy along theaggregate demand curve.O real GDP and the price level that arise in the short run as short-run aggregate supply shifts the economy along theaggregate demand curve.O real GDP and the price level that arise in the short run as aggregate demand shifts the economy along the short-runaggregate supply curve.

Given:MPC=0.8Now,Government spending multiplier=1(1-MPC)Government spending…

Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? $2 billion $3 billion $4 billion O $6 billion O $10 billion

Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the government increase spending to shift the aggregate demand curve right by $10 billion? $2 billion $3 billion $4 billion O $6 billion O $10 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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