Essay
Suppose the C/Y line shifts to the right because of a change in attitude about the future. At the same time, because of political pressure, the government share of GDP declines, with the result that the interest rate stays constant.
(A) If the investment share is the anly thing that affects prowth in the system, what wril happen to growth?
(B) If the cansumption share increased by 5 percent what must heve heppened to the goverrment share?
(C) Suppose that when the C/rline shifted to the right and the government cut spending the interest rate actually fell. What happened to each of the fau shares in this case?
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(A) Because the investment share schedue...View Answer
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