"Suppose that in a closed economy in which Y=Yn, with Yn-5000, C=500+ 0.5(Y-T) and G=1000 and T=1000 the government decides to increase G permanently by 1000. We know that in the medium-run:" A S will decrease by 350. (B) S will decrease by 250. S will decrease by 150. D S will remain constant in the medium-run.

"Suppose that in a closed economy in which Y=Yn, with Yn-5000, C=500+ 0.5(Y-T) and G=1000 and T=1000 the government decides to increase G permanently by 1000. We know that in the medium-run:" A S will decrease by 350. (B) S will decrease by 250. S will decrease by 150. D S will remain constant in the medium-run.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 61P: Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you...

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