3. Suppose that investment as a fraction of output in the United States rises permanently from 0.15 to 0.18. Assume that capital's share is (a) By about how much does output eventually rise relative to what it would have been without the rise in investment? (b) By about how much does consumption rise relative to what it would have been without the rise in investment? (c) What is the immediate effect of the rise in investment on consumption? About how long does it take for consumption to return to

3. Suppose that investment as a fraction of output in the United States rises permanently from 0.15 to 0.18. Assume that capital's share is (a) By about how much does output eventually rise relative to what it would have been without the rise in investment? (b) By about how much does consumption rise relative to what it would have been without the rise in investment? (c) What is the immediate effect of the rise in investment on consumption? About how long does it take for consumption to return to

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.3P

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39 - Which consumption is dependent on income?A) Marginal ConsumptionB) Nominal ConsumptionC) Real ConsumptionD) Autonomous ConsumptionE) Stimulated Consumption
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