Plentilandia is a country facing a recession. Plentilandian consumers become pessimistic aboutfuture economic conditions and reduce their total consumption. Use diagrams to answer thefollowing:a) Assume marginal propensity to consume is high in Plentilandia. What is the impact onconsumption, investment output, interest rate and the trade balance?b) Assume the marginal propensity to consume foreign goods and services is high inPlentilandia. What is the impact on consumption, investment output, interest rate and thetrade balance?

Part A: High Marginal Propensity to Consume in PlentlandiaWhen the marginal propensity to consume…

Answered: Plentilandia is a country facing a…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 6SCQ: Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram...

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a) Compute the ratio of exports to imports for the total and for eachcategory of goods listed in the table. Add the ratios to the table (you can edit thetable by clicking on it. If by any chance this does not work for you, make yourown table and insert it here)
Sub : EconomicsPls answer very faast.I ll upvote. Thank You
Real Interest A Ra te World interest rate, fo Real Exchange Ra te Ex E Ę₂ Supply of Loare ble Funds Derrand for Loa rable Funds Quantity of Loanable Funds Supply of Canadian Dollars (5-1) D₁ Do Quantity of Dollars Refer to the Figure 13-2. Suppose that these diagrams refer to Canada. If the interest rate was initially at r0 and Japan voluntarily restricted its exports to Canada, what would happen to the interest rate? a. It would stay at r0. O b. It would decrease because supply would shift right. OC. It would increase because supply would shift left. O d. It would decrease because demand would shift left. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.

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