Classical model-suppose desired investment spending falls

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Using the classical model, suppose desired Investment spending falls. Explain (don't just tell) how each of the following would change, if at all.

a. Real GDP

b. National Savings (Y-C-G)

c. Real Interest Rates

Using the classical Model, suppose taxes decrease by $100 while government spending is constant. Also, the Marginal Propensity to Consume is 0.90. For a, b, c below, how much does each of the following change, if at all, and in which direction. For D, tell which direction.

a. Real GDP

b. National Savings (Y-C-G)

c. Investment Spending

d. Real Interest Rates

Reference no: EM131241460

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