The Effect of an Increase in Exports on the Equilibrium GDP in the Keynesian

Friday July 8, 2022

Macroeconomics Task: Requirements: 250 words for each question Questions 1 and 2 also requires to show the new equilibrium on Keynesian income-expenditure (with explanation) Questions: 1. Explain the effect of an increase in exports on the equilibrium GDP in the Keynesian income-expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium. 2. Carefully explain the effect of an increase in income tax rate on the equilibrium GDP in the Keynesian income-expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium. 3. Suppose commercial Bank A receives a new $100 deposit. a. What will be the total change in money supply as the result of this increase in deposits? Explain in detail. b. Discuss any ONE reason why the total change in money supply can be less that your answer in part a). (Think about what does the change in money supply depends on).


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