Solved

Suppose the C/Y Line Shifts to the Right Because of a Change

Question 168

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 only thing that affects growth in the system,what will happen to growth?
(B)If the consumption share increased by 5 percent,what must have happened to the government share?
(C)Suppose that when the C/Y line shifted to the right and the government cut spending,the interest rate actually fell.What happened to each of the four shares in this case?

Correct Answer:

verifed

Verified

(A) Because the investment share schedul...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents