Show using a graph how the following shocks would affect equilibrium output. (Which parameters in the Keynesian model change? How does that shift the expenditure schedule? What happens to output as a result?) (a) Business confidence increases (b) The stock market declines (c) Credit market conditions become easier (d) The US dollar depreciates relative to the Euro (e) The stock market booms in Canada (Hint: use one picture to show what happens to Canada, then another to show how this affects the US economy)

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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2. Practice with the Keynesian model-graphs
Show using a graph how the following shocks would affect equilibrium output. (Which parameters in the Keynesian
model change? How does that shift the expenditure schedule? What happens to output as a result?)
(a) Business confidence increases
(b) The stock market declines
(c) Credit market conditions become easier
(d) The US dollar depreciates relative to the Euro
(e) The stock market booms in Canada (Hint: use one picture to show what happens to Canada, then another to show
how this affects the US economy)
Transcribed Image Text:2. Practice with the Keynesian model-graphs Show using a graph how the following shocks would affect equilibrium output. (Which parameters in the Keynesian model change? How does that shift the expenditure schedule? What happens to output as a result?) (a) Business confidence increases (b) The stock market declines (c) Credit market conditions become easier (d) The US dollar depreciates relative to the Euro (e) The stock market booms in Canada (Hint: use one picture to show what happens to Canada, then another to show how this affects the US economy)
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