An increase in investment demand for any given level of income and interest
rates—due, for exa...
An increase in investment demand for any given level of income and interest
rates—due, for example, to more optimistic "animal spirits"—will, within the is-lm
framework, output and interest rates.
a) increase; lower
b) increase; raise
c) lower; lower
d) lower; raise
Answers: 1
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Consider an economy where the government's budget is initially balanced. the production function, consumption function and investment function can be represented as follows y equals k to the power of alpha l to the power of 1 minus alpha end exponent c equals c subscript 0 plus b left parenthesis y minus t right parenthesis i equals i subscript 0 minus d r suppose that taxes increase. what happens to the equilibrium level of output?
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