III. We revisit the paradox of saving here in the context of the IS-LM framework in whichinvestment depends on the interest rate and output.a. Suppose households attempt to save more so that consumer confidence falls (let's capturethis change by a decrease in c, from the consumption function). Using an IS-LM diagram,show the effect of the fall in consumer confidence on output and the interest rate.b. How will the fall in consumer confidence affect consumption, investment, and privatesaving? Will the attempt to save more necessarily lead to more saving? Will this attemptnecessarily lead to less saving?c. What do you think about the chances of having the paradox of saving in the IS-LM modelcompared to the goods market equilibrium model (i.e., the IS relation)? Discuss.

Investment depends on interest rate and output. Paradox of savings states that an increase in…

Answered: III. We revisit the paradox of saving…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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An entrepreneur who owns and operates two businesses (A and B) would like to analyze their profitability. They would like your help in the analysis. They give you the annual net profit (in thousands of $) for each business from 2008-2020. Table 1: Annual Net Profits for Businesses A and B Business Year Profit Business Year Profit 2008 -50 2008 -10 2009 57 2009 30 2010 71 2010 27 2011 64 2011 22 2012 60 2012 21 2013 50 2013 20 A 2014 41 2014 24 2015 59 2015 24 2016 71 2016 32 2017 71 2017 36 2018 74 2018 37 019 81 20 40 2020 97 2020 49 a. Suppose you want to graph the distribution of profits. Explain why using only one stem- plot might not be optimal for the analysis. b. Describe the correct stemplot to use. Generate this stemplot. Explain your steps. What can you say about the distribution from this stemplot? c. When are stemplots useful? And why is that? d. Suppose that instead of having 26 observations you have 200 observations. What graph should you generate? e. What other type of…

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