After you have studied Economics in the News on pp. 734735, answer the following questions about the

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After you have studied Economics in the News on pp. 734–735, answer the following questions about the second quarter of 2020.

a. What was the planned change in inventories when the unplanned change in inventories was

$400 billion ($0.4 trillion)?

b. The BEA data show that exports of goods and services decreased by $568 billion and imports of goods and services decreased by

$645 billion. Were these changes in exports and imports changes in autonomous expenditure or changes in induced expenditure, and how do they influence the magnitude of the multiplier?

c. Using the assumptions made in Fig. 2 on p. 735, what is the value of the autonomous expenditure multiplier?image text in transcribedimage text in transcribedimage text in transcribed

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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