Suppose that a country's household saving rate (savings as % of GDP) increased from 54% in 2019
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Question:
Suppose that a country's household saving rate (savings as % of GDP) increased from 54% in 2019 to 55% in 2020. Explain whether this would strengthen or weaken the size of the economy's fiscal policy multiplier or leave it unchanged, and the reasons why? Next,use these figures presented in (b) to calculate the value of multiplier for 2020. Present your calculation formula and all of your working. a clear sentence explaining how to interpret the final number
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