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Unformatted text preview: (b) Calculate the short-run multiplier. (c) Give a long-run solution that will keep the price level low. QUESTION 3 An economy is initially at its potential. Then the marginal propensity to tax (t) falls. (a) Using an AD/AS/LRAS graph, show what happens immediately and in the short-run. (b) Comment on the economy's long-run options, and their advantages and disadvantages. ECON105 week 4 questions Eldar Sehic SFU 2010-1...
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This note was uploaded on 07/13/2010 for the course WFSC XDVBCX taught by Professor Sgfdb during the Spring '10 term at Simon Fraser.
- Spring '10