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Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969 Exercise 11
Show from national income accounting that
a. An increase in taxes (while transfers remain constant) must imply a change in net exports, government purchases, or the saving-investment balance.
b. An increase in disposable personal income must imply an increase in consumption or an increase in saving.
c. An increase in both consumption and saving must imply an increase in disposable income.
[ For both parts b and c assume there are no interest payments by households or transfer payments to foreigners.]
a. An increase in taxes (while transfers remain constant) must imply a change in net exports, government purchases, or the saving-investment balance.
b. An increase in disposable personal income must imply an increase in consumption or an increase in saving.
c. An increase in both consumption and saving must imply an increase in disposable income.
[ For both parts b and c assume there are no interest payments by households or transfer payments to foreigners.]
Explanation
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GDP is measure of total goods and servic...
Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
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