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Test3Bonus - wealth Assume the aggregate marginal...

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BONUS QUESTIONS TEST 3 NAME ID 1) Diamond claims that germs helped the Spaniards to conquer what is today Mexico and Peru’. The idea is that the Spaniards brought the germs that killed million of indigenous. Why the indigenous did not carry powerful germs that would have killed the Spaniards? Explain in one sentence. A: The indigenous population domesticated very few animals and did not live in close proximity with them. _________________________________________________ 2) Imagine that the economy is at the income-expenditure equilibrium. Then there is an exogenous increase of aggregate consumption of $20 due to an increase in
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Unformatted text preview: wealth. Assume the aggregate marginal propensity to consume is 0.75. By how much will income increase after the overall adjustment process is competed? (SHOW YOUR CALCULATION AND REPORT THE ANSWER BELOW) $20/(1-0.75)= __________$80_________ 3) Consider and economy in which: C=100, I=10, X=5, IM=8, G=5; TR=1, T=4 The symbols have the usual interpretation. How much of the 10 dollars of investments is financed through foreign savings? (SHOW YOUR CALCULATION AND REPORT THE ANSWER BELOW) KI=IM-X=8-5= ____3 ______...
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