18. The multiplier concept is important in the Keynesian model becauseSelect one:O a. both (b) and (c) of the above.Ob.It explains why a small change in government spending can have a large impact on equilibrium output.O c.It explains why a large change in government spending has such a small impact on equilibrium output.O d. It implies that households can spend more as they are able to earn more income later

The economies tend to operate upon the working of various entities, such as the households,…

18. The multiplier concept is important in the Keynesian model because Select one: O a. both (b) and (c) of the above. Ob. It explains why a small change in government spending can have a large impact on equilibrium output. It explains why a large change in government spending has such a small impact on equilibrium output. Oc. O d. It implies that households can spend more as they are able to earn more income later

18. The multiplier concept is important in the Keynesian model because Select one: O a. both (b) and (c) of the above. Ob. It explains why a small change in government spending can have a large impact on equilibrium output. It explains why a large change in government spending has such a small impact on equilibrium output. Oc. O d. It implies that households can spend more as they are able to earn more income later

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume a closed Keynesian economy: C = 280 + 0,8Yd Find the equilibrium level of output. 1= 200 G = 300 NT = 100 Select one: O a. 3500 ОБ. 2000 O c. 3000 O d. 2500 e. 5500
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1. Answer any 2 from a, b, and c below a. Why does AD slope downward? b. Which is the one example that is used in the video to explain changes in C, I, G, and NX? c. Which 2 forces are different in shifting AD?
b.makes prices "sticky." O c. maximizes its volatility. O d. automatically reduces recessionary trends. QUESTION 5 An increase in taxes shifts the O a. aggregate supply curve outward. O b. consumption schedule downward. O c. aggregate demand curve outward. O d. consumption schedule upward.
Question Two a. Explain the difference between a binding and non-binding borrowing constraints and thetwo consumption functions that result.b. From the Intertemporal Choice Model, many theories (non-Keynesian theories ofConsumption) came into being. Using graphical and mathematical expressions, compareand contrast the following theories on consumption behaviours:i. Franco Modigliani: Life-Cycle Hypothesisii. Milton Friedman: Permanent-Income Hypothesisiii. Robert Hall: Random Walk Hypothesis
1.The marginal propensity to consume in this economy is 2.The equilibrium level of output in this economy is
Question 1) a) In panel (a) the curve shifts upward, what could cause this? O Increase in G (govermment spending)O Decrease in HH wealth due to a decrease in housing pricesO An increase in the overall price levelo Areduction in govemment spending (G) b) Using Figure 2, if this economy is currently at Y1 and consumer wealth increases, then___O AD1 will shift to the left, reflecting a decrease in the real GDP at every price level.O AD1 willshift to the right. reflecting an increase in the real GDP at every price level.O an upward movement along the AD1 wiltake place., reflecting an increase in the price level.O a downward movement along the AD1 will take place, reflecting a decrease in the price level.
Which of the following is not an argument by those who oppose tax-law changes to encourage saving? O A. Saving is not very responsive to changes in the tax rate. O B. Saving is not an important determinant of a nation's ability to produce output. OC. Reducing the budget deficit instead of changing the tax laws could raise saving. O D. Changes in the tax laws to induce saving would distribute the tax burden less fairly.
A high interest rate will lead to: O a. low investment spending. O b. no investment spending. no changes in investment spending. O d. high investment spending. C.
The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6
Suppose the economy is such that the current GDP is great than potential GDP. If the government does not act, which of the following would we expect to occur? Select one or more: O a. Price levels will decrease Ob. GDP will increase O c. Price levels will increase O d. No effect of GDP e. GDP will decrease O f. No effect on price levels
In the aggregate expenditure (AE) model, the economy is driven to its equilibrium by changes in a. government expenditures on goods and services that are the result of changes in real GDP. O b. autonomous expenditures that are the result of changes in real GDP. investment that are the result of changes in real GDP. O C. O d. induced expenditures that are the result of changes in real GDP.