Question
Assuming an economy where the level of output ( Y ) is belowpotential, if an increase in government spending ( G ) shifts output towardspotential,
Assuming an economy where the level of output (Y) is belowpotential, if an increase in government spending (G) shifts output towardspotential, it is likely there will be ( ) in the interest parity relation.
an increase
no change
a decrease
Given the abovescenerio, net exports (NX) willlikely:
A.remain the same.
B.increase.
C.decrease.
D.can't be determined.
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Econometrics By Example
Authors: Damodar Gujarati
2nd Edition
1137375019, 9781137375018
