Q1. Suppose that there are crowding-out effects and the MPC is .9. By how much must the government increase expenditures to shift the aggregate demand curve right by $10 billion?
Q2. Pick a real or fictitious business. Create a scenario around this business in which a manager would decide to either stop operations in the short-run or going out of business in the long-run. Provide a rationale with your response.
Q3. How would I find out by how much the price of water needs to be raised to reduce demand by 40% if the price of elasticity is 2.0?