Given the AD/AS framework described by: Ỹ = ā – bm(r, – ī) %| IT, = T,-1 + vÝ, + ō, During the pandemic, US households could not go out and spend their income on services (restaurants, movies, etc) provided by US firms. Instead, they spent their income to buy more goods that they could use at home and which mostly were produced abroad. Which parameter would you change in the model to capture such an event?

Given the AD/AS framework described by: Ỹ = ā – bm(r, – ī) %| IT, = T,-1 + vÝ, + ō, During the pandemic, US households could not go out and spend their income on services (restaurants, movies, etc) provided by US firms. Instead, they spent their income to buy more goods that they could use at home and which mostly were produced abroad. Which parameter would you change in the model to capture such an event?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 1QP

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