nternational Macroeconomics Y = C+I+G, where C=30+0.5*Y, I=100-10*r M=500-10*r+0.1*Y (Y and r are endogenous, M and G are exogenous, Closed economy) If the government increase the spending from 30 to 40, (1) calculate the fiscal multiplier (2) change in output (3) crowding effect

nternational Macroeconomics Y = C+I+G, where C=30+0.5Y, I=100-10r M=500-10r+0.1Y (Y and r are endogenous, M and G are exogenous, Closed economy) If the government increase the spending from 30 to 40, (1) calculate the fiscal multiplier (2) change in output (3) crowding effect

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 9SQP

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Question

International Macroeconomics

Y = C+I+G, where C=30+0.5*Y, I=100-10*r

M=500-10*r+0.1*Y

(Y and r are endogenous, M and G are exogenous, Closed economy)

If the government increase the spending from 30 to 40,

(1) calculate the fiscal multiplier

(2) change in output

(3) crowding effect

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

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