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(Solved): PLEASE GRAPH CLEARLY. SHOW ME EACH POINT AND ITS PLOTS.
Suppose there is some hypothetical ec ...
PLEASE GRAPH CLEARLY. SHOW ME EACH POINT AND ITS PLOTS.
Suppose there is some hypothetical economy in which households spend \( \$ 0.50 \) of each additional dollar they earn and save the \( \$ 0.50 \) they have left over. The following graph plots the economy's initial aggregate demand curve \( \left(A D_{1}\right) \). Suppose now that the government increases its purchases by \( \$ 3 \) billion. Use the green line (triangle symbol) on the following graph to show the aggregate demand curve ( \( A D_{2} \) ) after the multiplier effect takes place. Hint: Be sure the new aggregate demand curve \( \left(A D_{2}\right) \) is parallel to \( A D_{1} \). You can see the slope of \( A D_{1} \) by selecting it on the following graph.