nternational Macroeconomics Y = C+I+G, where C=30+0.5*Y, I=100-10*r M=500-10*r+0.1*Y (Y and r are endogenous, M and G are exogenous, Closed economy) If the government increase the spending from 30 to 40, (1) calculate the fiscal multiplier (2) change in output (3) crowding effect
nternational Macroeconomics Y = C+I+G, where C=30+0.5*Y, I=100-10*r M=500-10*r+0.1*Y (Y and r are endogenous, M and G are exogenous, Closed economy) If the government increase the spending from 30 to 40, (1) calculate the fiscal multiplier (2) change in output (3) crowding effect
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 1SQ
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Y = C+I+G, where C=30+0.5*Y, I=100-10*r
M=500-10*r+0.1*Y
(Y and r are endogenous, M and G are exogenous, Closed economy)
If the government increase the spending from 30 to 40,
(1) calculate the fiscal multiplier
(2) change in output
(3) crowding effect
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