Macroeconomics

Assume that the economy is growing steadily and hasn’t had a recent recession A new administration increases

Question

Assume that the economy is growing steadily and hasn’t had a recent recession. A new administration increases

spending on the military by $200 billion. What is your estimate of the multiplier in this situation and what do you predict will be the impact on GDP? How would your answer change if the economy were in recession?

Macroeconomics

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