Consider the Canadian economy in a state depicted by the following graph. NX I(r) I S, I i. Use a graph and words to describe what would happen to I(r), S, NX, r. and r*, if anything, when consumers and firms experience a permanent loss of economic confidence. ii. Use a graph and words to describe what would happen to I(r), S, NX,r and r*, if anything, if the (domestic) government decides to increase the level of health care services in the country.

Consider the Canadian economy in a state depicted by the following graph. NX I(r) I S, I i. Use a graph and words to describe what would happen to I(r), S, NX, r. and r, if anything, when consumers and firms experience a permanent loss of economic confidence. ii. Use a graph and words to describe what would happen to I(r), S, NX,r and r, if anything, if the (domestic) government decides to increase the level of health care services in the country.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 3PA

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