M Suppose that GDP (Y) IS 5.000. Consumption (C) is given by the equation C - 500 +.5(Y-T). Investment (1) is given by the equation 1- 2,000 - 100r, where r is the real interest rate in percent. Government spending (G) is, 1000, and Taxes (T) are also 1,000. When a technological innovation changes the investment function to 1-3,000-100r. O Frises by 1,000 and r rises by 10 percentage points. O I rises by 1,000 and r is unchanged. Olis unchanged and r rises by 10 percentage points. I is unchanged and r rises by 15 percentage points

M Suppose that GDP (Y) IS 5.000. Consumption (C) is given by the equation C - 500 +.5(Y-T). Investment (1) is given by the equation 1- 2,000 - 100r, where r is the real interest rate in percent. Government spending (G) is, 1000, and Taxes (T) are also 1,000. When a technological innovation changes the investment function to 1-3,000-100r. O Frises by 1,000 and r rises by 10 percentage points. O I rises by 1,000 and r is unchanged. Olis unchanged and r rises by 10 percentage points. I is unchanged and r rises by 15 percentage points

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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