Expansionary monetary policy and contractionary monetary policy
Explain the difference between expansionary monetary policy and contractionary monetary policy.
Suppose when income is $10,000, aggregate expenditures are also $10,000. If income were hypothetically $0, aggregate expenditures would be $2,500.
a. At an income of $10,000, what are induced expenditures?
b. At an income of $10,000, what are autonomous expenditures?
c. What is the marginal propensity to expend?
d. What is the multiplier?