Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter B, Problem 16RQ
Exercise D16
Why are savings, taxes, and imports referred to as “leakages” in calculating the multiplier effect?
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Chapter B Solutions
Principles of Macroeconomics 2e
Ch. B - Exercise D6 What is on the axes of an...Ch. B - Exercise D7 What does the 45-degree line show?Ch. B - Exercise D8 What determines the slope of a...Ch. B - Exercise D9 What is the marginal propensity to...Ch. B - Exercise D10 Why are the investment function, the...Ch. B - Exercise D11 Why does the import function slope...Ch. B - Exercise D12 What are the components on which the...Ch. B - Exercise D13 Is the equilibrium in a Keynesian...Ch. B - Exercise D14 What is an inflationary gap? A...Ch. B - Exercise D15 What is the multiplier effect?
Ch. B - Exercise D16 Why are savings, taxes, and imports...Ch. B - Exercise D17 Will an economy with a high...Ch. B - Exercise D18 How do economists use the multiplier?Ch. B - Exercise D19 What does it mean when the aggregate...Ch. B - Exercise D20 Which model, the AD/AS or the AE...Ch. B - Exercise D21 What are some reasons that the...Ch. B - Exercise D22 What should the government do to...Ch. B - Exercise D23 Two counties are in a recession....Ch. B - Exercise D24 Compare two policies: a tax cut on...Ch. B - Exercise D25 What role does government play in...Ch. B - Exercise D26 If there is a recessionary gap of 100...Ch. B - Exercise D27 What other changes in the economy can...
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Similar questions
- Exercise D17 Will an economy with a high multiplier be more stable or less stable than an economy with a low multiplier in response to changes in the economy or in government policy?arrow_forwardExercise D15 What is the multiplier effect?arrow_forwardExercise D27 What other changes in the economy can be evaluated using the multiplier?arrow_forward
- Exercise D10 Why are the investment function, the government spending function, and the export function all drawn as flat lines?arrow_forwardExercise D26 If there is a recessionary gap of 100 billion, should the gamut increase spending by 100 billion to close the gap? Why? Why not?arrow_forwardExercise D8 What determines the slope of a consumption function?arrow_forward
- Exercise D11 Why does the import function slope down? What is the marginal propensity to import?arrow_forwardExercise D22 What should the government do to relieve inflationary pressures if the aggregate expenditure is greater than potential GDP?arrow_forwardExercise B3 Why are indifference curves sleep on the left and flatter on the right?arrow_forward
- Exercise D23 Two counties are in a recession. Country A has an MPC of 0.8 and Country B has an MPC of 0.6. In which country will government spending have the greatest impact?arrow_forwardExercise D19 What does it mean when the aggregate expenditure line crosses the 45-degrss line? In other words, how would you explain the intersection in words?arrow_forwardExercise D7 What does the 45-degree line show?arrow_forward
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