Suppose the government in this economy decides to decrease government purchases by $250 billion. the decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to-$62.5 billion. this decreases income yet again, causing a second change in consumption equal to. the total change in demand resulting from the initial change in government spending is
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Home » Business » Suppose the government in this economy decides to decrease government purchases by $250 billion. the decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to-$62.5 billion.