Interest rate 4% 3% + $50 500 530 D₂ D₁ Savings, investment, government borrowing (millions of dollars) Consider the graph of Nation A which is in recession and in order to increase the economy the government chooses to raise the spending and decides to borrow $ 50 million to construct famous economists' statues. Decide which of the given statements is true? a) There will be an increase in investment spending beyond $530 million. b) There will be a decline in investment spending to $480 billion. c) There will be an increase in consumption of $30 million. d) There will be a net change in aggregate spending of 30 million.

Interest rate 4% 3% + $50 500 530 D₂ D₁ Savings, investment, government borrowing (millions of dollars) Consider the graph of Nation A which is in recession and in order to increase the economy the government chooses to raise the spending and decides to borrow $ 50 million to construct famous economists' statues. Decide which of the given statements is true? a) There will be an increase in investment spending beyond $530 million. b) There will be a decline in investment spending to $480 billion. c) There will be an increase in consumption of $30 million. d) There will be a net change in aggregate spending of 30 million.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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