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If the multiplier equals 2 and the AD shortfall is $6 million, the desired fiscal stimulus is

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If the multiplier equals 2 and the AD shortfall is $6 million, the desired fiscal stimulus is $3 million.

What is the shortfall?

The term shortfall has referred to the deficiency of something in the market. When the availability of goods is not adequate and suppliers fail to provide them. This situation is considered as shortfall.

To calculate the desired fiscal stimulus

desired fiscal stimulus= AD shortfall/ Multiplier

                                    =$6 million/ 2

                                    = $3 million

Therefore, the desired fiscal stimulus is $3 million.

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