4.2 - Determination of Income in Two-Sector Model
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Practice Questions
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Define Aggregate Demand.
💡 Hint: What components make up Aggregate Demand?
What does ex ante mean?
💡 Hint: Think about what is determined before actual results are observed.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does Aggregate Demand consist of?
💡 Hint: Think about the factors that contribute to total demand.
Is an increase in MPC likely to increase overall consumption?
💡 Hint: Recall what happens when income increases.
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Challenge Problems
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Analyze how a significant autonomous spending cut would affect equilibrium income. Discuss the potential outcomes.
💡 Hint: Think about how less spending impacts businesses and employment.
Evaluate the effects of a rising MPC on savings in the economy. What would be the long-term repercussions?
💡 Hint: Consider how behavioral changes in spending affect overall economic health.
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