« previous next »

Author Question: Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by ... (Read 43 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?

Not getting enough sleep can greatly weaken the immune system. Lack of sleep makes you more likely to catch a cold, or more difficult to fight off an infection.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

The actions of Frzb and the Frizzled receptor protein show how embryonic development represents a ba The actions of Frzb and the Frizzled receptor protein show how embryonic development represents a ba
Income of Adult Children Compared With That of Their Parents Income of Adult Children Compared With That of Their Parents
Common Adverse Effects of Corticosteroids Common Adverse Effects of Corticosteroids
Regional Variation in Income and Access to the Sea Regional Variation in Income and Access to the Sea
Saving Rates by Income Quintile, 2003 Saving Rates by Income Quintile, 2003
Please fully explain the answer with steps Please fully explain the answer with steps
Video: Red Blood Cells - Erythropoietin (EPO)

For a complete list of videos, visit our video library