ANSWERS TO HOMEWORK WEEK FOUR EC141

ANSWERS TO HOMEWORK WEEK FOUR EC141 - ANSWERS TO HOMEWORK...

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ANSWERS TO HOMEWORK WEEK FOUR EC141 CHAPTER 7 7. 2006 2007 2008 Bundle price $400 $531.25 $550 Index 1.00 1.328 1.375 % change 32.8 3.54 Yes. There was a modest increase in the price level between 2007 and 2008. 8. (a-b) Yes, both statements can be true. The labor force of Tappania may have grown faster than the number of employed, which can lead to an increase in both the number of people who are looking for work but are currently not working, and an increase in the number of people who are employed. CHAPTER 8 1. MPC : Marginal propensity to consume; the fraction of additional income that is spent on consumption. Multiplier: the concept that a sustained increase in one component of aggregate expenditure (like I ) could lead to an increase in the equilibrium level of income that is a multiple of the initial increase in expenditure. In a simple economy, the multiplier is equal to 1/ MPS or 1/ (1 – MPC ). Actual investment: The actual amount of investment that takes place; it includes items such as unplanned changes in inventories. Planned investment: Those additions to the capital stock
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ANSWERS TO HOMEWORK WEEK FOUR EC141 - ANSWERS TO HOMEWORK...

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