Consider the following model:
d) Suppose now that there is a change in public spending so that G=70. What would be the effect on the IS curve? Show your results in a graph.
e) Suppose now that the change in d) is neutral to deficit so that G=70 and T=20. What would be the effect on the IS curve? Show your results in a graph.
f) Suppose now that interest rate decreases to 0.05. Calculate output and represent your results in a graph.
note: if you have any doubts feel free to comment i am here to help you . dont give direct thumbs down. if you are satisfied with the answer hit the like button.
Get Answers For Free
Most questions answered within 1 hours.