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This question is based on the following diagram. Assume that G and T increase by R100. Z 220 200 AG = 100 45° ACT = ? 0 Which one of the following statements is INCORRECT? 1000 100 80 Z₁ NN Y

This question is based on the following diagram. Assume that G and T increase by R100. Z 220 200 AG = 100 45° ACT = ? 0 Which one of the following statements is INCORRECT? 1000 100 80 Z₁ NN Y

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter5: Business And Economic Forecasting
Section: Chapter Questions
Problem 1.2CE: Plot the logarithm of arrivals for each transportation mode against time, all on the same graph....
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If taxes then increase by R100, cT will be R80, the new equilibrium level of output and income will be R1 100, and it will be represented by point c in the above diagram. B. The above diagram and questions imply the working of the balanced budget multiplier. C. Although there is an increase of R100 in taxes, there will be still an expansionary net effect of R500 on the equilibrium level of output and income. D. If government spending increases by R100, the equilibrium level of output and income will be R1 500, and the Z curve will shift to Z1.
Transcribed Image Text:If taxes then increase by R100, cT will be R80, the new equilibrium level of output and income will be R1 100, and it will be represented by point c in the above diagram. B. The above diagram and questions imply the working of the balanced budget multiplier. C. Although there is an increase of R100 in taxes, there will be still an expansionary net effect of R500 on the equilibrium level of output and income. D. If government spending increases by R100, the equilibrium level of output and income will be R1 500, and the Z curve will shift to Z1.
This question is based on the following diagram. Assume that G and T increase by R100. Z 220 200 0 AG = 100 45° ACT = ? 1000 Which one of the following statements is INCORRECT? 100 80 Z₁ Z₂ Z Y
Transcribed Image Text:This question is based on the following diagram. Assume that G and T increase by R100. Z 220 200 0 AG = 100 45° ACT = ? 1000 Which one of the following statements is INCORRECT? 100 80 Z₁ Z₂ Z Y
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