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Consider an economy described by the following: The expression for the MP curve is: OA. r= 1 + 0.8. OB. r=2+0.8. OC. r=1+0.5. O D. r=2+0.5. The expression for the AD curve is: OA. Y= 30.5-1.2. OB. Y=30.5 - 1. O C. Y=24.4-1.2. O D. Y=24.4-1. Assume that t = 2%. The real interest rate ris %. (Round your response to two decimal places.) C = $3 trillion ¡ = $1.2 trillion G = $3.5 trillion T = $3 trillion NX = $1.5 trillion f = 1 mpc = 0.8 d = 0.3 x = 0.1 λ = 0.5 F = 1

Consider an economy described by the following: The expression for the MP curve is: OA. r= 1 + 0.8. OB. r=2+0.8. OC. r=1+0.5. O D. r=2+0.5. The expression for the AD curve is: OA. Y= 30.5-1.2. OB. Y=30.5 - 1. O C. Y=24.4-1.2. O D. Y=24.4-1. Assume that t = 2%. The real interest rate ris %. (Round your response to two decimal places.) C = $3 trillion ¡ = $1.2 trillion G = $3.5 trillion T = $3 trillion NX = $1.5 trillion f = 1 mpc = 0.8 d = 0.3 x = 0.1 λ = 0.5 F = 1

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Consider an economy described by the following: The expression for the MP curve is: O A. r=1+0.8. O B. r= 2 + 0.8. OC. r= 1 + 0.5. O D. r=2+0.5. The expression for the AD curve is: O A. O B. Y=30.5-1. OC. Y= 24.4-1.2. OD. Y= 24.4 - 1. -1.2π. Assume that = 2%. The real interest rate r is%. (Round your response to two decimal places.) The equilibrium level of output is $ trillion. (Round your response to two decimal places.) C = $3 trillion 7 = $1.2 trillion G = $3.5 trillion 7 = $3 trillion NX = $1.5 trillion f = 1 mpc = 0.8 d = 0.3 X = 0.1 λ = 0.5 r = 1
Transcribed Image Text:Consider an economy described by the following: The expression for the MP curve is: O A. r=1+0.8. O B. r= 2 + 0.8. OC. r= 1 + 0.5. O D. r=2+0.5. The expression for the AD curve is: O A. O B. Y=30.5-1. OC. Y= 24.4-1.2. OD. Y= 24.4 - 1. -1.2π. Assume that = 2%. The real interest rate r is%. (Round your response to two decimal places.) The equilibrium level of output is $ trillion. (Round your response to two decimal places.) C = $3 trillion 7 = $1.2 trillion G = $3.5 trillion 7 = $3 trillion NX = $1.5 trillion f = 1 mpc = 0.8 d = 0.3 X = 0.1 λ = 0.5 r = 1
Consumption is $ trillion. (Round your response to two decimal places.) Investment is $ trillion. (Round your response to two decimal places.) Net exports are $ trillion. (Round your response to two decimal places.) Suppose the Fed increases to r=2. The real interest rate is %. (Round your response to two decimal places.) trillion. (Round your response to two decimal places.) The equilibrium level of output is $ Consumption is $ trillion. (Round your response to two decimal places.) Planned investment is $ trillion. (Round your response to two decimal places.) Net exports are $ trillion. (Round your response to two decimal places.) When the Fed increased r, output, consumption, planned investment, and net exports all decreased. The Fed increased because it thinks the economy will in the future, or there is a risk that inflation will in the future.
Transcribed Image Text:Consumption is $ trillion. (Round your response to two decimal places.) Investment is $ trillion. (Round your response to two decimal places.) Net exports are $ trillion. (Round your response to two decimal places.) Suppose the Fed increases to r=2. The real interest rate is %. (Round your response to two decimal places.) trillion. (Round your response to two decimal places.) The equilibrium level of output is $ Consumption is $ trillion. (Round your response to two decimal places.) Planned investment is $ trillion. (Round your response to two decimal places.) Net exports are $ trillion. (Round your response to two decimal places.) When the Fed increased r, output, consumption, planned investment, and net exports all decreased. The Fed increased because it thinks the economy will in the future, or there is a risk that inflation will in the future.
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