Solution Exercise 7 Part 2 - GDP is unchanged Unemployment...

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Exercise 7, Question 4: When the economy is operating at full employment: Government (public) investment increases. The money quantity (M1) increases Aggregate demand (AD) rises
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Unformatted text preview: GDP is unchanged Unemployment is unchanged Private consumption is unchanged Private investment falls. This fall is equal to the investment in the bridge....
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This note was uploaded on 10/25/2009 for the course BUSINESS 772 taught by Professor Sadeh during the Spring '07 term at Interdisciplinary Center Herzliya.

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