Suppose for every dollar change in household wealth, consumption expenditures change by $0.05. If real household wealth declines by $45 billion, potential GDP is $120 billion, and the multiplier effect

Suppose for every dollar change in household wealth, consumption expenditures change by $0.05. If real household wealth declines by $45 billion, potential GDP is $120 billion, and the multiplier effect for the second year after an expenditure shock is 1.1, what is the total change in output relative to the potential for the second year?

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Suppose for every dollar change in household wealth, consumption expenditures change by $0.05. If real household wealth declines by $45 billion, potential GDP is $120 billion, a…

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