ECON 162 Lecture Notes - Lecture 9: Fiscal Multiplier, Xm Satellite Radio, Keynesian Cross
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Ae = c + i + g + (x - m) G = 100 (x - m) = 100: find the equilibrium level of gdp. Aeo = co + i + g + (x-m) + by. Y* = (1/1-. 8) x 1000 = 5,000 equilibrium in part a). (p. 195) ae = 1000 y* =5,000. 1/(1-b) = 1/(1-0. 8) = 1/. 2 = 5: what is the spending multiplier in this model, using a keynesian cross (or 45-degree line) diagram, show graphically the, if government spending increases by , find the new equilibrium level of. Y** = 5,500: these paragraphs provide the reasoning for the great depression as told by fdr. During this time production was greater than expenditures which went against the equilibrium of having them equal to each other. This caused a cycle in which firms over produced when there was not enough income throughout the nation. This is shown as a structural weakness in the economy by fdr.
