ustify your answer: [Assume households either consume or save their income only.] a)If the private sector is balanced and transfers are held constant, an increase in taxes implies a decrease in net exports. b)An increase in disposable personal income must imply an increase in private investment. c)Holding the government budget deficit constant, an increase in net exports must imply an increase in disposable income.
ustify your answer: [Assume households either consume or save their income only.] a)If the private sector is balanced and transfers are held constant, an increase in taxes implies a decrease in net exports. b)An increase in disposable personal income must imply an increase in private investment. c)Holding the government budget deficit constant, an increase in net exports must imply an increase in disposable income.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 3SQ
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a)If the private sector is balanced and transfers are held constant, an increase in taxes implies a decrease in net exports.
b)An increase in disposable personal income must imply an increase in private investment.
c)Holding the government budget deficit constant, an increase in net exports must imply an increase in disposable income.
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