91影视

The household spending (consumption expenditure) changes by $5 billion for every 1% change in the household wealth.Thus, a fall in the consumption wealth by 5% will reduce the consumption by $25 billion (= $5 billion 脳 5).

On the other hand, a fall in interest rate by 1% increases the investment by $20 billion.Thus, a 2% fall in the interest rate will increase the investment by $40 billion (= $20 billion 脳 2).

Thus, the net effect of changes in consumption expenditure and investment in the aggregate demand is as follows:

饾洢AD =饾洢Investment 鈥擆潧�Consumption

饾洢AD = $ (40 鈥� 25) billion

饾洢AD = $15 billion

Thus, the aggregate demand curve will initially shift rightward by $15 billion.

The multiplier value, as given in the question, is 4. Therefore, an initial increase of $15 billion in aggregate expenditure will eventually increase the aggregate demand by four times.

饾洢AD = k 脳饾洢Aggregate Expenditure

饾洢AD = 4 脳 $15 billion

饾洢AD = $60 billion

Therefore, the aggregate demand will eventually increase by $60 billion, and the AD curve will further shift rightward by $60 billion.