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Q1. In a private closed economy, the marginal propensity to consume is 0.25, consumption equals income at $120 billion and the level of investment is $40 billion. Illustrate what is the equilibrium level of income
Q2. A country that has never had its own currency has formed a central bank and put you in charge of developing money. It needs to perform the necessary functions of any good currency efficiently (i.e., being a medium of exchange, a store of value and a unit of account). Because your country is interested in trading with other members of the global economy, other nations must have faith in its fitness and the currency exchange marketplaces must be willing to accept it.
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If income rises from 1000 to 1800 and consumption rises from 1100 to 1700 the marginal propensity to save.
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Federal Reserve lowers the required reserve ratio from 0.10 to 0.05. How does this affect the simple money multiplier.
If the government imposes a tax on the production of cars, which of the following will occur in the market for cars.
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