Consider an open economy with a current population of 0.55 million people, and where the potential GDP is $3.24 billion. Consumer expenditure is represented by the following equation: C = 60+ 0.75DI. Exports are constant at $500 million, and investors want to spend $400 million at every level of income. The government purchases are $300 million, imports are constant at $450 million, and taxes are $200 million. (Question 8 of 12) Now, consider that investors become optimistic about the country's future, and raise their investment to $565 million in the following period. At the same time, given the birth rate, mortality rate, and net migration, the economy experienced an increase of 20% in its population. What changes (if any) would one expect as a result of these events? (complete the following sentences) The change in investment to $730 million suggests that there was in investment. This would lead to in the equilibrium level of GDP, and there is ✓ gap.
Consider an open economy with a current population of 0.55 million people, and where the potential GDP is $3.24 billion. Consumer expenditure is represented by the following equation: C = 60+ 0.75DI. Exports are constant at $500 million, and investors want to spend $400 million at every level of income. The government purchases are $300 million, imports are constant at $450 million, and taxes are $200 million. (Question 8 of 12) Now, consider that investors become optimistic about the country's future, and raise their investment to $565 million in the following period. At the same time, given the birth rate, mortality rate, and net migration, the economy experienced an increase of 20% in its population. What changes (if any) would one expect as a result of these events? (complete the following sentences) The change in investment to $730 million suggests that there was in investment. This would lead to in the equilibrium level of GDP, and there is ✓ gap.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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