ECON105week3questions - ECON105 week 3 questions QUESTION 1...

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QUESTION 1 Imagine a full economy where consumers want to consume at least $30 plus 0.9 of their disposable income. Also, investment is $30, government spending is $10, and exports are $20. Finally, the MPT is 1/3, and the MPImport is 0.2. (a) Find and graph the equilibrium income in this economy, using an AE/Y graph.
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Unformatted text preview: (b) If exports rise by $15, what will be the new equilibrium income? QUESTION 2 Using a NS/NAF graph and a LEAKAGES/INJECTIONS graph, show what happens when the net tax rate (MPT) decreases. ECON105 week 3 questions Eldar Sehic SFU 2009-3...
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  • Spring '10
  • s
  • Macroeconomics, government spending, equilibrium income, new equilibrium income

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