Question

Suppose a country institutes an investment tax credit and that leads to an initial increase in investment spending of $100 billion. suppose the multiplier is 1.5 and the economy's real gdp is $5,000 billion. this action is

Answer 1

initial increase in investment spending of = $100 billion
multiplier is = 1.5
economy's real gdp is = $5,000 billion
This action refers to an expansionary and this will will shift the aggregate demand curve to the right or upward by $150 billion.
= (100 billion x 1.5 (multiplier)) = $150 billions