Problem
On February 17, 2010, the Wall Street Journal reported on spending from the stimulus package signed into law a year earlier. Part of that stimulus package ($93 billion) was paid out in the form of tax credits. However, even though interest rates did not change significantly during that year, aggregate output did not increase. Using the parameters from the numerical exercise on page 229.
a) Calculate the decrease in autonomous consumption expenditure necessary to offset the effect of the $93 billion tax cut.
b) Show your answer graphically (the effect of the tax cut and the decrease in autonomous consumption expenditure).
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.