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Unformatted text preview: where every variable in the right hand side is exogenous variable. The comparative statistic results will be as r = (1/d)a r = (1/d)c r = (1/d)G r = (-b/d)T Based on these, you should be able to answer problems 8 and 10 verbally, mathematically and graphically. Another way to see this is to take total differentiation of Y a b(Y T) G = c-dr And obtain Y - a b(Y - T) - G = c - rd - dr To find the effect of a change in T, i.e., T > 0, we set Y = 0, a = 0, G = 0, c = 0, and have b(T) = - dr r = (-b/d)T. Apply the same approach, we can obtain r = (1/d)a; r = (1/d)c; r = (1/d)G...
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This note was uploaded on 09/08/2010 for the course ECON 102 at San Jose State University .