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Unformatted text preview: 18) False – SS are transfer payments and have no influence on the economy 19) False – decrease productivity 20) b 21) b 22) d 23) a In this economy income will stay the same no matter what the government does - Y=C+S+T. But T increases, so C or S must decrease to preserve the equality. Because the government has a balanced budget we could simply write from the Loanable funds market that S=I+G-T. Since G-T stays the same, if S goes down a little bit, so must I. 24) a 25) $40, 90, $5.2 billion 26) a) Excess demand for workers b) Real wage will go up to ensure the market clears c) $15 d) $1,300,500,000 27) a) $ 1.5 billion surplus b) $ 4 billion c) $ 4 billion d) Yes e) $ 5.5 billion 28) a) 9 Widgets per worker b) 3 Widgets c) 5 Widgets per worker, 3 Widgets...
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This note was uploaded on 08/08/2008 for the course ECON 102 taught by Professor Drozd during the Spring '08 term at Wisconsin.
- Spring '08