What is the change in equilibrium expenditure if the price level remains at 100?

What will be an ideal response?


The initial change in equilibrium expenditure is $200 . The initial effect of the increase in investment increases equilibrium expenditure by the change in investment times the multiplier. The multiplier is 2 and the change in investment is $100 billion, so the initial change in equilibrium expenditure is $200 billion.

Economics

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