« previous next »

Author Question: Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by ... (Read 55 times)

bobbysung

  • Hero Member
  • *****
  • Posts: 519
on: Jun 30, 2018
Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by 20 billion. 2 . Taxes fall by 20 billion. Assume that the marginal propensity to consume is 0.8.

Question 2

According to Gresham's Law:
 a. money with relatively high intrinsic value will be used for transactions.
  b. money with relatively low intrinsic value will be used for transactions.
  c. money with relatively high intrinsic value will cause inflation.
  d. money with relatively low intrinsic value will cause inflation.
  e. inflation increases the intrinsic value of money.


eliasc0401

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jun 30, 2018
Answer to Question 1

1 . 100 billion calculated as: 20 billion /(1 - 0.8)
2 . 80 billion calculated as: (-0.8  -20 billion)/(1 - 0.8)

Answer to Question 2

b


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Effects of Groundwater Pumping Effects of Groundwater Pumping
The world attempted to deal with Somalia as if it were a real country but painfully learned that Som The world attempted to deal with Somalia as if it were a real country but painfully learned that Som
Fast food effects on body Fast food effects on body
Neurotransmitter regulation and dysregulation effects. Neurotransmitter regulation and dysregulation effects.
Ten Leading Causes of Death in High-Income Countries, 2008 Ten Leading Causes of Death in High-Income Countries, 2008
Please explain the different Rf values for xanthophyll’s in paper chromatography compared to ... Please explain the different Rf values for xanthophyll’s in paper chromatography compared to ...
Video: Causes of Acne

For a complete list of videos, visit our video library