Suppose that investment spending decreases by $300 and no leakages occur except household saving. Assume further that households have a marginal propensity to save of 0.4 The spending multiplier in this case is 120 and the total or cumulative change in aggregate demand or spending as a result of the change in investment would be 180 sign. $ Enter numbers only rounded to one decimal place (no dollar sign). If negative, enter the minus (-)

Suppose that investment spending decreases by $300 and no leakages occur except household saving. Assume further that households have a marginal propensity to save of 0.4 The spending multiplier in this case is 120 and the total or cumulative change in aggregate demand or spending as a result of the change in investment would be 180 sign. $ Enter numbers only rounded to one decimal place (no dollar sign). If negative, enter the minus (-)

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 3.7P

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