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Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66. If autonomous exports have just fallen by $20, what will happen to equilibrium income? What about unemployment? Show the adjustment process to the new equilibrium using a graph.
Consider the economic data for Country A: Unemployment level of 15% Natural Rate of Unemployment is 6%. Required Reserves is 25% C = 50 + 0.75Y; I = 600; G = 250 (note: T = 200 for
Suppose the price elasticity of demand for used cars is estimated to be 3 what does this mean?
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what are the factors that shift the LM curve what is the real interest rate and the nominal interest rate. what is expected rate of inflation why has the real interest rate that cl
Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is
what is gdp
The Red Lobster sells fresh seafood. Red Lobster receives daily shipments of farm-raised fish from a nearby supplier. Each fish cost $2.50 and is sold for $4.00. To maintain its re
Only two identical firms i = A;B, each with marginal cost MCi = 40 and no fixed cost, operate in a market with demand: Q p 1 160 2 120 3 90 4 70
Augmented Saving An alternative way of determining equilibrium GDP is to find the level of income where the sum of desired injections equals the sum of desired leakages. Desi
The LM-curve in the AS-AD model The LM-curve will shift upwards (downward) when P is increases (decreases) in the AS-AD model is moved L
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