III. 1) Trace through the effects of a shock involving an decrease in M. Explain and graphically illustrate your work. 2) Trace through the effects of a shock involving an increase in autonomous taxes Explain and graphically illustrate your work. 3) Comment on the value of the multiplier for this model as compared to the multiplier in our previous model. Briefly explain. 4) Explain why fiscal crowd-out is less than 100% in this model.
III. 1) Trace through the effects of a shock involving an decrease in M. Explain and graphically illustrate your work. 2) Trace through the effects of a shock involving an increase in autonomous taxes Explain and graphically illustrate your work. 3) Comment on the value of the multiplier for this model as compared to the multiplier in our previous model. Briefly explain. 4) Explain why fiscal crowd-out is less than 100% in this model.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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