a. Suppose a government education program succeeds in getting households to save more (you may interpret this as a downward shift in the consumption function). Using the long-run model of the economy developed in Chapter 3, graphically illustrate the impact of the higher saving rate by households. Be sure to label: i the axes ii. the curves iii. the initial equilibrium values iv. the direction curves shift v. the terminal equilibrium values

b. State in words what happens to i. the real interest rate ii. nafional saving iii. investment iv. consumption v. output.

Question

b. State in words what happens to  i. the real interest rate  ii. nafional saving  iii. investment  iv. consumption v. output.

Quizplus · Accepted Answer

The Answer of a. Suppose a government education program succeeds in getting households to save more (you may interpret this as a downward shift in the consumption function). Using the long-run model of the economy developed in Chapter 3, graphically illustrate the impact of the higher saving rate by households. Be sure to label:  i the axes ii. the curves iii. the initial equilibrium values iv. the direction curves shift v. the terminal equilibrium values

b. State in words what happens to  i. the real interest rate  ii. nafional saving  iii. investment  iv. consumption v. output.

A Suppose a Government Education Program Succeeds in Getting Households