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Unformatted text preview: $72 Year 4 $14 $49 Year 5 $5 $42 2) Assume that the MPC = .7 and that the multiplier = 2.2 (this is a world with taxes). For each scenario describe how much the aggregate demand curve shifts and in what direction. a) The government spends $44 billion more on government expenditures b) The government spends $51 billion less on government expenditures c) The government spends $12 billion more on untaxable transfer payments d) The government spends $21 billion less on untaxable transfer payments...
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- Spring '08