According to the Keynesian model, what are the two components
Question # 00134280
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Updated on: 11/15/2015 05:10 AM Due on: 12/15/2015
1. According to the Keynesian model, what are the two components of consumption
spending? What factors determine how consumption changes when real disposable
income changes? Explain.
2. Suppose that the government pursues expansionary fiscal policy by lowering taxes. What
are the expected demand-side effects? What are the possible offsets to the demand-side
effect? How might supply-side effects change these results?
3. Explain the differences between the public debt and the government budget deficit.
Explain how deficit spending could be a burden to future generations.
4. What are the direct and indirect effects of an increase in the money supply?
5. What are the effects of a tariff on a good?
spending? What factors determine how consumption changes when real disposable
income changes? Explain.
2. Suppose that the government pursues expansionary fiscal policy by lowering taxes. What
are the expected demand-side effects? What are the possible offsets to the demand-side
effect? How might supply-side effects change these results?
3. Explain the differences between the public debt and the government budget deficit.
Explain how deficit spending could be a burden to future generations.
4. What are the direct and indirect effects of an increase in the money supply?
5. What are the effects of a tariff on a good?
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Solution: According to the Keynesian model, what are the two components