Consider the following multiplier model diagram:
For each of the following,draw a picture to show what would happen to the equilibrium level of income in the economy.
(a)Consumers,in their delight over the Dow Jones Industrial Average reaching 15,000,decide to go on a spending spree.
(b)Between 2000 and 2009 the euro increased in value by over 30% relative to the U.S.dollar.
(c)The prospect that the Social Security system will not be viable beyond the year 2017 has many,many people saving more of their income than ever before.

Question

Consider the following multiplier model diagram:
  For each of the following,draw a picture to show what would happen to the equilibrium level of income in the economy.
(a)Consumers,in their delight over the Dow Jones Industrial Average reaching 15,000,decide to go on a spending spree.
(b)Between 2000 and 2009 the euro increased in value by over 30% relative to the U.S.dollar.
(c)The prospect that the Social Security system will not be viable beyond the year 2017 has many,many people saving more of their income than ever before.

Quizplus · Accepted Answer

The Answer of Consider the following multiplier model diagram:
  For each of the following,draw a picture to show what would happen to the equilibrium level of income in the economy.
(a)Consumers,in their delight over the Dow Jones Industrial Average reaching 15,000,decide to go on a spending spree.
(b)Between 2000 and 2009 the euro increased in value by over 30% relative to the U.S.dollar.
(c)The prospect that the Social Security system will not be viable beyond the year 2017 has many,many people saving more of their income than ever before.

Consider the Following Multiplier Model Diagram