Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz

تمرين 7

Continue with the same equations.
a. What is the value of a G which corresponds to the simple multiplier (with taxes) of Chapter 10
b. By how much does an increase in government spending of
increase the level of income in this model, which includes the money market
c. By how much does a change in government spending of
affect the equilibrium interest rate
d. Explain the difference between your answers to parts a and b.