EC140 Lecture Notes - Lecture 6: Unemployment, Canadian Dollar, Business Cycle
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EC140 Full Course Notes
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Ae will shift up from a rise in business con dence and increase in government purchases. Mpc = 0. 6 mpim =0. 10 net tax rate = 0. 25 gov"t increases spending by 100 million, what happens to equilibrium national income: increase by 154 million. Increase in household wealth: an appreciation of canadian dollar. Autonomous expenditure: increases: household wealth increases, business con dence increases, increase in gov"t spending, not! An increase in the marginal propensity to save will have what effect on equilibrium. Monday, january 22, 2018 national income: national income will decrease. Mps is equivalent to a reduction of the mpc, if mpc goes down than the mps goes down and that results in a lower income. If everyone tries to save, we don"t actually save more: national income is unchanged, national income will increase, answer is uncertain, none of the above.
