4, What effect does a temporary increase in government purchasesfor example, to fight a warhave on desired

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4, What effect does a temporary increase in government purchases—for example, to fight a war—have on desired consumption and desired national saving for a constant level of output? What is the effect on desired national saving of a lump-sum tax increase? Why is the effect of a lump-sum tax increase controversial? 5. What are the two componentsof the user cost of eapital? Explain why each is a cost of using a capital good. 6. What is the desired capital stock? How does it depend on the expected future marginal product of capital, the user cost of capital, and the effective tax rate?

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Macroeconomics Plus Myeconlab With Pearson Global Edition

ISBN: 377221

9th Canadian Edition

Authors: Andrew B. Abel ,Ben Bernanke ,Dean Croushore

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