Draw a production possibilities frontier with the government spending share on the horizontal axis and the nongovernment share of GDP on the vertical axis. All else being equal, assume there is an increase in government purchases.
(A) Use the prochuction possibilites frantier to show what happens.
(B) Daes yaur answer ta part (A) carrespand to what the spenfing allacation madel wauld predict?
(C) Campared to the production passibilities curve analysis, what adritional insight does the spending macation model intradce?

Question

Draw a production possibilities frontier with the government spending share on the horizontal axis and the nongovernment share of GDP on the vertical axis. All else being equal, assume there is an increase in government purchases.
 (A) Use the prochuction possibilites frantier to show what happens.
(B) Daes yaur answer ta part (A) carrespand to what the spenfing allacation madel wauld predict?
(C) Campared to the production passibilities curve analysis, what adritional insight does the spending macation model intradce?

Quizplus · Accepted Answer

The Answer of Draw a production possibilities frontier with the government spending share on the horizontal axis and the nongovernment share of GDP on the vertical axis. All else being equal, assume there is an increase in government purchases.
 (A) Use the prochuction possibilites frantier to show what happens.
(B) Daes yaur answer ta part (A) carrespand to what the spenfing allacation madel wauld predict?
(C) Campared to the production passibilities curve analysis, what adritional insight does the spending macation model intradce?

Draw a Production Possibilities Frontier with the Government Spending Share