ps8 - Economics 202 Name: _______________ Principles of...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Economics 202 Name: _______________ Principles of Macroeconomics Professor Melick Problem Set #8 Due Friday April 4, 2008 1. Numerical Problem #3 from Abel and Bernanke Chapter 10, found on page 392. 2a) Using the classical version of the IS/LM/FE graphical framework without misperceptions, as well as graphs for the goods, asset, and labor markets, illustrate and explain the short-run and long-run effect of a cut in the tax rate on labor income. In each of the four graphs show only three points, an initial general equilibrium before the tax cut (labeled point A), the short-run equilibrium after the change in the tax cut (labeled point B), and the new long-run general equilibrium (labeled point C). 2b) Using the classical version of the AS/AD graphical framework including the misperceptions theory, as well as graphs for the goods, asset, and labor markets, illustrate and explain the short- run and long-run effect of a cut in the tax rate on labor income. In each of the four graphs show...
View Full Document

This note was uploaded on 05/13/2010 for the course ECON 323 taught by Professor Jakes during the Spring '10 term at Alcorn State.

Page1 / 5

ps8 - Economics 202 Name: _______________ Principles of...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online