In which country new equilibrium level of income greater

Reference no: EM133277860

Question - Two identical countries, Country A and Country B, can each be described by a Keynesian cross model. The MPC is 0.6 in each country. Both countries are worried about the state of the deficit. Country A decides to cut spending by $3 billion, while Country B decides to increase taxes by $3 billion. In which country will the new equilibrium level of income be greater? Explain don't answer by pen paper

Reference no: EM133277860

Questions Cloud

How many firms will exist in this market : If a representative firm, with long-run total cost given by TC = 50 + 2q + 2q2, operates in a competitive industry, how many firms will exist in this market

Should the fact that the bus driver works for the government : Please watch the video Bus driver fired over Facebook post about student's lunch money.

What is the monopolist optimal p and q : Industry demand is given by the inverse demand function log p = 100 - 2 log q, What is the monopolist's optimal P and Q

Clients situation do you think you would need to know : What aspects of the client, or the client's situation do you think you would need to know more about (for example, information regarding the individual client

In which country new equilibrium level of income greater : The MPC is 0.6 in each country. Both countries are worried about the state of the deficit. In which country new equilibrium level of income greater

Describe the nature versus nurture controversy : PSY 101 R Eastern New Mexico University Describe the nature versus nurture controversy, and give an example of a trait and how it might be influenced by each

What does case tell you about corporate governance of google : What does the case tell you about the corporate governance of Google? What makes the corporate governance of Google successful?

Discuss how a female, hindu client may not respond : PSY 101 Bay Path University discuss how a female, Hindu client may not respond positively to her therapist when her therapist tells her that she should stand up

How long will they be able to recover the investment : If the company manufactures one drone per month, how long (in months) will they be able to recover the investment

User Account

All Pages