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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 5
Suppose the consumption behavior in problem 1 changes so that C = 100 +.9 Y , while I remains at 50.
a. Is the equilibrium level of income higher or lower than it was in problem 1( a ) Calculate the new equilibrium level, Y ' , to verify this.
b. Now suppose investment increases to I = 100, just as in problem 1( d ). What is the new equilibrium income
c. Does this change in investment spending have more or less of an effect on Y than it did in problem 1 Why
d. Draw a diagram indicating the change in equilibrium income in this case.
a. Is the equilibrium level of income higher or lower than it was in problem 1( a ) Calculate the new equilibrium level, Y ' , to verify this.
b. Now suppose investment increases to I = 100, just as in problem 1( d ). What is the new equilibrium income
c. Does this change in investment spending have more or less of an effect on Y than it did in problem 1 Why
d. Draw a diagram indicating the change in equilibrium income in this case.
Explanation
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Income is that amount of money which an ...
Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
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