Example 7.2
Y=C+I+G+X-Z
Consumption C = 25 + 0.8(Y - T)
Investment I = 75
Government expenditure G = 70
X=30
Z = 0.14Y
T = 0.2Y
-Refer to Example 7.2. If government wanted to raise the equilibrium GDP to $450, it could:
A) raise G by $50 and not change NT.
B) raise G by $25 and not change NT.
C) raise G by $30.
D) raise both G and NT by $25.
Correct Answer:
Verified
Q86: Q87: If exports decrease from positive values to Q88: Example 7.1 Q89: Example 7.2 Q90: Example 7.2 Q92: Example 7.2 Q93: In an open economy with constant prices, Q94: Effectiveness of fiscal policy is dampened due Q95: Longer the time-lags in fiscal policy, lesser Q96: If households expect that the expenditure programs
Y=C+I+G
Consumption: C = 40 + .8Y
Investment
Y=C+I+G+X-Z
Consumption C = 25 + 0.8(Y
Y=C+I+G+X-Z
Consumption C = 25 + 0.8(Y
Y=C+I+G+X-Z
Consumption C = 25 + 0.8(Y
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