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Hi, can i please get help in understanding these questions and how to answer them? The test book doesn't explain the answer. Thank you so

Hi, can i please get help in understanding these questions and how to answer them? The test book doesn't explain the answer. Thank you so much

  1. Explain the effect of an increase in imports (= an increase in marginal propensity to import) on the equilibrium GDP in the Keynesian income-expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium.
  2. Carefully explain the effect of a $100 decrease in government transfers (subsidies for education, pensions etc.) on the equilibrium GDP in the Keynesian income- expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium.
  3. Suppose the Central bank of a country issues additional money as cash (additional $100).

a) What will be the total change in money supply if all $100 are held as cash?

b)What will be the total change in money supply if all $100 are deposited in a commercial bank?

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