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In the real intertemporal model consider a temporary increase in government spending. a) Show what happens to the real interest rate, r, and real output,
In the real intertemporal model consider a temporary increase in government spending. a) Show what happens to the real interest rate, r, and real output, Y . b) Show what happens to the real wage rate, w, and employment, N . c) What happens to the quantities of consumption, C, and investment, I? d) What happens to the future capital stock? e) What is the total government expenditure multiplier?
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