Westeros has recently discovered a new technology that would potentially increase profit for most firms. As a result, investment increases. a. In a Keynesian cross model, graph the changes and predict what will happen to equilibrium GDP. b.What happens to the IS curve? Will it shift or will there be a movement along the curve? Graph it and explain. c. In an IS-LM model, using the same graph, predict what happens to the equilibrium interest rate and GDP.

Westeros has recently discovered a new technology that would potentially increase profit for most firms. As a result, investment increases. a. In a Keynesian cross model, graph the changes and predict what will happen to equilibrium GDP. b.What happens to the IS curve? Will it shift or will there be a movement along the curve? Graph it and explain. c. In an IS-LM model, using the same graph, predict what happens to the equilibrium interest rate and GDP.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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