ps5 - 3 Baumol and Blinder Ch 9 Test Yourself problem 6 In...

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Economics 205: Principles of Macroeconomics Mark Moore Fall 2008 Problem Set 5 1. Baumol and Blinder, Ch. 9, Test Yourself, problem 4. 2. Baumol and Blinder, Ch. 9, Test Yourself, problem 5. In addition, show the effects of the increase in investment on (i) the income expenditure diagram and (ii) the position of the AD curve. By how much does the AD curve shift horizontally?
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Unformatted text preview: 3. Baumol and Blinder, Ch. 9, Test Yourself, problem 6. In addition, if G and T each increase by $100, what is the effect on the AD curve? Does it shift, and if so, by how much? 4. Suppose NX=X-IM =0. If the economy has a recessionary gap, how do national saving and investment compare? How do they compare if the economy has an inflationary gap?...
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