8 explain the paradox of thrift with the use of a

This preview shows page 2 - 4 out of 4 pages.

8. Explain the "paradox of thrift" with the use of a graph assuming that investment is autonomous of aggregate output.
9. If the government wants to reduce unemployment what are some ways it should change spending and taxes?
10. Assume the following behavioral equations for a macroeconomy: C = 100 + .9Y d , I = 50, T = 100 and G = 40 Calculate the equilibrium level of output.
11. Determine the impact of an increase in government spending of $10 billion when the MPC is .9. Determine the impact of a decrease in government spending of $5 billion when the MPS is .5.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture