Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I've already answered number 2 and I am having trouble understanding question three so please explain as well! Thanks!!:)

Transcribed Image Text:For good or ill, various constituencies are concerned with and want the goyernment to resolve various macroeconomic variables.
In general, these constituencies are concerned with:
Type A: rGDP (Y) and the UnRate (remember Okun's Law). These people want Y to increase and the UnRate to decrease.
b. Type B: Net Exports, particularly imports. These people want Net Exports to increase (preferably be positive) and imports to
decrease.
а.
Type C: T – G (the Federal budget balance) and T/Y. These people want a balanced budget or surplus and taxes to be a lower
share of Y.
) For Type A:
Which policy(s) will achieve their desires? Circle the correct answers.
с.
а.
All
None
A IL
AXT
A mpiļ
A mpc↑
Aí »
A G†
b. Which of the policies that Type A supports will Type B also support? Circle the correct answers.
A mpc↑
All
None
A GT
AIL
AX1
A mpiļ
A tf
c. Which of the policies that Type A supports will Type C also support? Circle the correct answers.
Δ mpct
с.
All
None
AX↑
A mpiļ
A Gf
Which of the policies will have support of all 3 types?
AXT
d.
A mpiļ
A mpc†
All
None
A tf
A GT
AIL
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