What happens to the interest rate and investment

Assignment Help Macroeconomics
Reference no: EM13189903

Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanced-budget change? Does your answer depend on marginal propensity to consume.

Reference no: EM13189903

Questions Cloud

The united states participation in nato : The united states' participation in NATo
Describe what is the underground economy : Explain the difference between fixed-production technology and variable-production technology. Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology Should they d..
Neighbor connectivity analysis. : Propose a technique for detecting gaps of length ranging between 1 and L pixels in line segments of gradient image. Assume that the background is constant, that all lines have been coded with the same intensity level, and that the lines are 1 pixel t..
Renewed eruption in caldera can produce resurgent dome : Individual volcanoes erupt fairly regularly, and if the recurrence interval is known, their eruptions can be accurately predicted. Renewed eruption in a caldera can produce a resurgent dome.
What happens to the interest rate and investment : Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanced-budget change? Does your answer depend on marginal propensity to consume.
Find who live in high sales tax areas : It has been found that people who live in high sales tax areas are much more likely to purchase over the internet where they are usually exempt from sales tax from firms located in another state. The NGA has proposed a uniform tax of 5% on all int..
Warning sign of imminent eruption : What is the term for an unconsolidated accumulation of any size of pyroclastic grains? Which of the following events is a warning sign of imminent eruption?
Effectiveness of stms strategy : Evaluate the effectiveness of STM's strategy of combining as many existing initiatives as possible in order to simplify their approach to TQM.
Stratovolcano recently erupted : This stratovolcano recently erupted in the United States. Although it warned of its impending eruption, it still killed people, partly because it first blew sideways and produced a monstrous landslide. The explosion sent tons of ash skyward and blast..

Reviews

Write a Review

Macroeconomics Questions & Answers

  Who has comparative advantage in each product

Suppose US and Russia produce only two goods meat and potatoes in a week's time according to the table below which shows their production possibilities. Meats(lbs) Potatoes (lbs) Who has absolute advantage in each product? Who has comparative..

  Will you support another stimulus package

What is your opinion and will you support another stimulus package? Why or why not?

  National income accounting and canadian economy

In national income accounting identity showing the equality between national saving and investment, what is the representation of private saving and what is the representation of public saving?

  Simple keynesian consumption function

Why would the simple Keynesian consumption function predict that this strategy would work and the nominal interest rate cannot fall below zero. What might the Fed do to try to achieve the optimal real interest rate you calculate in Part b?

  Question on equilibrium situation

Describe what happens to price of a bond that pays a fixed percent of the face value every year when interest rates in the economy rise.

  Determine the bond price

Assume a $1,000 par-value bond was issued last year with a promised yearly rate of return (yield) of 6% when market interest rates on comparable securities were also 6%.

  Would you have a clear-cut pricing strategy

a regular price or a sale price. Suppose that when one firm announces the sale price and the other announces the regular price for a particular product, the firm announcing the sale price attracts 50 million extra customers to earn a profit of $5 ..

  Choice of incumbent firm-behaviour of firms

Describe a long-term contract shoeing all necessary steps that the current supplier can offer the buyer that will be attractive to the buyer and will also strengthen the incumbent's monopoly power.

  Find the monopolistically competitive high price-low output

World Class Manufacturing Operations has enjoyed rapid increase in sales & high operating profits. But now the firm faces potentially fierce competition from a large number of competitors as WCMO's important basic patents expire during the coming yea..

  Determine the optimal fraction of output purchased by govt

In the Macroeconomics book by Stephen Williamson (5th Edition) in the Appendix for Ch. 7-8 Problem 1 the problem asks: Suppose in Solow growth model that there is government spending financed by lump-sum taxes, with total government spending G=gY,..

  Compute the four-firm concentration ratio

Compute the four-firm concentration ratio (C4) before the merger. Show your work and round your answer to 4 decimal places.

  Firm pricing rule and profit maximization

The Hanover Manufacturing Company believes that the demand curve for its product is P = 5 - Q-Evaluate the wisdom of the firm's pricing policy

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd