Fill in the blanks to make the following statements correct. a. With the addition of government and

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Fill in the blanks to make the following statements correct.

a. With the addition of government and foreign trade to our simple macro model, the marginal propensity to spend out of national income is __________ than the marginal propensity to consume out of disposable income.

b. Consider the following equation: .
The term t represents __________. The term m represents . The term z represents .

c. The marginal propensity to spend out of national income is less than the marginal propensity to consume out of disposable income because some national income is collected as __________ and some national income is spent on __________.

d. If there is no government and no foreign trade, the simple multiplier can be written as , where z = __________. With government and foreign trade, we have z = __________.

e. In comparison to a model with no government and foreign trade, once we add taxes and imports, the value of the simple multiplier is __________. As a result, the effect on equilibrium national income of a change in autonomous expenditure will be __________ in the presence of taxes and imports.

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Ragan Macroeconomics

ISBN: 978-0134835822

16th Edition

Authors: Christopher Ragan

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