Im trying to figure out what initial and additional effects would a 20 thousand dollar tax reduction with a 3/4 marginal propensity to consume would have on the aggregate demand.
I first thought of ...
Let us say the estimated equation for the economy’s aggregate demand is
Y = 400 – 15P + 8G
And the estimated equation for the economy’s aggregate supply is
Y = 5 + 11P – 10W
where Y is the country’s ...