Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Assume that the State of New York aproves a bill that eliminates sales taxes and at the same time the Congress in Washington D.C

1. Assume that the State of New York aproves a bill that eliminates sales taxes and at the same time the Congress in Washington D.C passes a tax bill which increases income taxes. Establish the macroeconomics effects of these policies on consumption, investment, interest rate and savings? Use the models (consumption model and loanable funds market) and the graphs. Explain thoroughly. 2. If the government wants to increase the amount of savings in the economy, how should it alter government spending? What effect will this action have on the interest rate in the economy? (Use the appropriate graph and model to illustrate the effect). Explain thoroughly. 3. Let's suppose we are living in a country in which opportunities of making profits, and entreprenurial activity are main determinants of investment demand. In this scenario, how is parameter b? How this affect the elasticity of investment with respect to changes in interest rate? How a cut in the benchmark interest rate could affect the quantity of investment in the economy? Explain thoroughly, use models, and graphs. 4. Explain how any technological advancement could affect investment, aggregate demand and income. Use graphs, models and explain.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managers And The Legal Environment

Authors: E. Bagley

9th Edition

1337555177, 978-1337555173

More Books

Students also viewed these Economics questions

Question

Design Truth Table W wheather L Lecture Y going to univ e.-tk Le

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago

Question

The quality of the proposed ideas

Answered: 1 week ago