Suppose the U.S. economy is Keynesian (i.e., sticky prices in the short run) and can be described by the following relationships: C d = 20 + 0.75Y I d = 75 − 1300r + 100α NX = 80 − 0.1Y − e e = 50α − 0.05Y + 100r Md P = Y − 100r where α represents an index of political instability in the rest of the world (relative the USA); i.e., the higher is α, the more unstable.
Suppose the U.S. economy is Keynesian (i.e., sticky prices in the short run) and can be described by the following relationships: C d = 20 + 0.75Y I d = 75 − 1300r + 100α NX = 80 − 0.1Y − e e = 50α − 0.05Y + 100r Md P = Y − 100r where α represents an index of political instability in the rest of the world (relative the USA); i.e., the higher is α, the more unstable.
Chapter1: Making Economics Decisions
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Suppose the U.S. economy is Keynesian (i.e., sticky prices in the short run) and can be described by the following relationships: C d = 20 + 0.75Y I d = 75 − 1300r + 100α NX = 80 − 0.1Y − e e = 50α − 0.05Y + 100r Md P = Y − 100r where α represents an index of political instability in the rest of the world (relative the USA); i.e., the higher is α, the more unstable.
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