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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.
The AS curve Say that nominal wage in year 1 (at a particular point in time) is equal to 1000. On the horizontal part of response curve, real wage is constant and equal to its
Financing of the external payments deficit: The trend in India's widening CAD during the second half of the eighties, both in absolute terms and also as a proportion of the
a good is classified as inferior if a. consumers buy less when the price rises b. consumers buy less when the income rises c. consumers buy less when the price falls d.
Write the compensation principal of socitovsky
Three defective electric tooth brushes were shipped to a drug store by Clean Brush Products along with 17 non defective ones. A) What is the probability the first two electric t
A student is taking two courses, History and Math. The probability that the student will pass the history course is .60, and the probability of passing the math class is .70. The p
A mechanical engineer who is anticipating paying for his daughter's college education plans to start depositing money now (year 0) and continue through year 17. If he deposits $ 50
Criticism of keynesian system
Suppose the consumption function is C = $500 billion + 0.55Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially
The LM curve with inflation We know that LM curve will shift upwards when P increases (presuming MS is constant). This is still true though we can also add that LM curve glid
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