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

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5. 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?

6. What are the two components of the user cost of capital? Explain why each is a cost of using a capital good.

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Macroeconomics Global Edition

ISBN: 978-1292318615

10th Edition

Authors: Andrew Abel ,Ben Bernanke ,Dean Croushore

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