Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 23, Problem 4.5P
Subpart (a):
To determine
MPC and MPS.
Subpart (b):
To determine
Graphing the equations and solving the equilibrium income.
Subpart (c):
To determine
New equilibrium income, multiplier.
Subpart (d):
To determine
Savings function.
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Part a
Consider the following is the economy of
Country Z:
C = 200 + 0.85Y
I= 100
Answer the following questions:
Calculate the equilibrium level of output
algebraically using the saving-investment (S-I)
approach.
Which of the following best describes the catch-up effect?
Question 14 options:
It is easier for a country to grow fast and "catch up" with richer countries if it starts out relatively poor.
Saving will always "catch up" with investment spending.
If investment spending is low, increased saving will help investment to "catch up."
Rich countries aid relatively poor countries so as to help them "catch up."
Chapter 23 Solutions
Principles of Economics (12th Edition)
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