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27-04-2024
Business

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8) What is the multiplier 8) What is the multiplier? Suppose we have a MPC of .5, and suppose government decides to send $150 billion dollars worth of rebate checks to each taxpayer ($600 each). Using the multiplier, what are the total effects on aggregate demand? Graphically illustrate with AD/AS curves. Show the initial effect and then the total effect from the multiplier.

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