T chart of Canny bank Assets Liabilities Reserve: $10,000 Demand Deposit: $200,000 Government bonds: $300,000 Owners equity: $110,000 Laceland buys $50,000 of government from canny bank. (Money multiplier = 20) Maximum change caused by this is $1,000,000 change. (a)Based on this change above, Try to calculate the change in nominal gross domestic product based on the change above. (Use mv=py) (b) Assume the economy os Econland is initially at full employment, Does change ($1,000,000) increase, decrease, stay the same the real output in the long run? Explain.

T chart of Canny bank Assets Liabilities Reserve: $10,000 Demand Deposit: $200,000 Government bonds: $300,000 Owners equity: $110,000 Laceland buys $50,000 of government from canny bank. (Money multiplier = 20) Maximum change caused by this is $1,000,000 change. (a)Based on this change above, Try to calculate the change in nominal gross domestic product based on the change above. (Use mv=py) (b) Assume the economy os Econland is initially at full employment, Does change ($1,000,000) increase, decrease, stay the same the real output in the long run? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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d
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