shivam999

Assume that labor supply in 2017 increases from 17 to 18. Which of the following statements is true about the effect of this change on equilibrium wage in 2017?

Which of the following statements is true about the effect of this change on equilibrium investment in 2016?

f) All else equal, equilibrium investment will not change in the closed economy but will increase the small open economy.

g) All else equal, equilibrium investment will not change in the small open economy but will increase the closed economy.

h) All else equal, equilibrium investment will decrease in both the closed and open small economy, but the decrease is larger in the small open economy.

i) All else equal, equilibrium investment will decrease in both the closed and open small economy, but the decrease is larger in the closed economy.

j) All else equal, equilibrium investment will increase in both the closed and open small economy, but the increase is larger in the small open economy.

Exercise
Answer the following questions with TRUE, FALSE or UNCERTAIN and say why. Each response should not exceed 1/2 page.
1. In equilibrium, an increase in the money supply leads to a decrease in bond prices.
2. The income tax cuts promised by the candidates during the electoral campaign
should lead to an increase in national savings and investments.
3. An exogenous increase in the marginal propensity to consume increases GDP
equilibrium in a closed economy.
4. A drop in consumer confidence (modeled as a drop in the constant C0
in the linear consumption function) decreases the equilibrium GDP and investments in
balance.
5. An increase in the supply of central bank money can be accomplished by purchases on the
open market.
6. In a closed economy, private savings must equal investments in equilibrium.