The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 408 Weeks Ago, 2 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
7. Policy mixes
Suggest a policy mix to achieve each of the following objectives.
a.   Increase Y while keeping i  constant.
b.  Decrease the fiscal deficit while keeping Y constant. What happens to i? To investment?
8. The (less paradoxical) paradox of saving
A chapter problem at the end of Chapter 3 considered the effect of a drop in consumer confidence on private saving and
investment, when investment depended on output but not on the interest rate. Here, we consider the same experiment in the context of the IS–LM framework, in which investment depends on the interest rate and output.
a.   Suppose households attempt to save more, so that con- sumer confidence falls. In an IS–LM diagram, show the ef- fect of the fall in consumer confidence on output and the interest rate.
b.  How will the fall in consumer confidence affect consump- tion, investment, and private saving? Will the attempt to save more necessarily lead to more saving? Will this at- tempt necessarily lead to less saving?
Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll