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Macroeconomics - Coursework Example

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If national income level is OA, the equilibrium, in this case, will be achieved through an upward shift of the withdrawals curve, W given that the injections curve is horizontally fixed and inelastic along that line. This is an indication of the excess in the injections than the…
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Download file to see previous pages Upon shifting the curve W, the new equilibrium point will likely be at R. This is an indication of injection of income into the market cycle by either the households or the government through various spending activities.
An excess in the withdrawals more than the injections will imply that there shall be less investments. Consequently, an excess in the withdrawals implies that households are saving some of their income and not spending it; thus, leading to a reduction in the circular flow of income (Carlin & Soskice, 2006).
An increase in the government spending would imply increase in injections that would result in an upward shift by UT. Equilibrium will now be attained at point U being the point where the new injections curve will intersect with the withdrawals curve (Carlin & Soskice, 2006). As a result, there will be a rise in the national income by an amount of BC denoted by J’.
a. Find data for nominal GDP at US dollar current prices with a base year of your choice and calculate real GDP for Australia, France, Germany, Greece, Ireland, Japan, UK, and USA from 2005 to 2014. Present the data on a ...Download file to see next pagesRead More
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