Question

3 of 30 (2 complete) HW Score: 5%, 1.5 Score: 0 of 1 pt End of Chapter 1.5 Question H The graph to the right shows the goods market in equilibrium at point Y, Use the graph to show the effect of the following change AE=Y Households become more pessimistic and decide to buy fewer new homes. 1.) Using the line drawing tool, show how the above change shifts the AE curve, all other things being equal. Label this curve AE, 2.) Using the point drawing tool plot the economy's new equilibrium. Label this point Y Aggregate Expenditures Carefully follow the instructions above, and only draw the required objects Output

Answer 1

MPC=0.8) multiplier = I'mpe = 10.8, = - = 51.263 MPC -0.81 4. 26315 1 in G=1 40 billion will increas Y by 736.842 tax Multiplier =- MPC -0.8 - MPC - origu in takes by 140 billion leads to an sapp= -4.26315(146) = 596.84 G tones 4 a 7 to $140 billion the egen evil of real app increases by $ 140 billin