Suppose desired investment spending falls

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Reference no: EM131241531

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: EM131241531

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