Macroeconomics Study Guide

Macroeconomics Study Guide

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An exploration of the macroeconomic aspects of economic growth, business cycles, and monetary and trade policy qMacroeconomicsq explains how recent tax cuts have combined with the war on terrorism and slow economic growth to contribute to increasing budget deficits. Also included are discussions of international trade policy, comparative advantage, and outsourcing, as well as valuable Web access to more than 250 minutes of new videos from Paul Solman of the q Lehrer NewsHour.qANSWERS ^a€” SHORT-ANSWER QUESTIONS 1. ... The AP curve is a 45-degree line through the origin. At all points on the AP curve, output equals income. ... income, multiply the sum of all autonomous expenditures by the multiplier. In this case the multiplier is 1/ ( 1 a€” .75) = 4, so equilibrium income is $800. (252- 253) 4 ... To avoid inflation, government can reduce government spending by the inflationary gap divided by the multiplier. ... Chapter 10 THE MULTIPLIER MODEL 131.

Title:Macroeconomics Study Guide
Author:David C. Colander, Douglas Copeland, Jenifer Gamber
Publisher:McGraw-Hill/Irwin - 2005-07-08


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