Create a closed economy that is in a state of equilibrium at first. Assume that public saving decreases dramatically. Demonstrate how changes in interest rates (and a related variable) may bring the market into equilibrium after illustrating how changes in public savings affect the graph. What is the impact of a tiny open economy (with fixed interest rates) on the analysis?

Create a closed economy that is in a state of equilibrium at first. Assume that public saving decreases dramatically. Demonstrate how changes in interest rates (and a related variable) may bring the market into equilibrium after illustrating how changes in public savings affect the graph. What is the impact of a tiny open economy (with fixed interest rates) on the analysis?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter18: The Keynesian Model

Section: Chapter Questions

Problem 6SQP

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