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Author Question: Use the data in the Worked Problem on p. 287 (page 699 in Economics). Calculate the change in ... (Read 53 times)

Tirant22

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on: Jun 29, 2018
Use the data in the Worked Problem on p. 287 (page 699 in Economics). Calculate the change in equilibrium expenditure when investment decreases by 150 billion.
 
  What will be an ideal response?

Question 2

A recent study indicated that Stricter college alcohol policies such as raising the price of alcohol, or banning alcohol on campus, decreases the number of students who use marijuana.
 
  This indicates that the cross-price elasticity between alcohol and marijuana is positive.
 
 
  Indicate whether the statement is true or false


alexanderhamilton

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The multiplier equals 4 . Consequently the change in equilibrium expenditure equals (4)  (150 billion), or a decrease of 600 billion.

Answer to Question 2

FALSE


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