Answer:
Left by $400; Left by $300
Explanation:
Given that,
Marginal propensity to consume, MPC = 0.75
Government spending multiplier = 4
(a) If the government decreases its purchases by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in government spending to the government spending multiplier.
Aggregate demand curve shift left by
= Change in government spending × Government spending multiplier
= $100 × 4
= $400 million
(b) If the government increases income taxes by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in taxes to the tax multiplier.
Tax multiplier:
= MPC ÷ (1 - MPC)
= 0.75 ÷ (1 - 0.75)
= 0.75 ÷ 0.25
= 3
Aggregate demand curve shift left by
= Change in taxes × Tax multiplier
= $100 × 3
= $300 million
When calculating a <u>loan's effective rate</u> and interest compounds <u>every two months </u>then the<em> value of n</em> would be 6.
In a year there are 12 months and when the interest rate is said to be compounded in every two months then it implies that the <u>number of months </u>would be <em>6 months. </em>
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Thus, the calculation of<u> compounded interest</u> would be derived with the following formula:
Learn more about the effective rate of interest here:
brainly.com/question/26077394
