ECO211: How will the following situations affect the investment demand curve? Draw a diagram for each to illustrate: Macroeconomics Assignment, UiTM, Malaysia

School

Universiti Teknologi MARA (UiTM)

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Assignment Type

Individual Assignment

Subject

ECO211: Macroeconomics

Uploaded by Malaysia Assignment Help

Date

05/08/2023

Question 1

How will the following situations affect the investment demand curve? Draw a diagram for each to illustrate your answer.

  • A new type of manufacturing machine has been developed that is not only cheaper but also more energy efficient.
  • To reduce the fiscal deficit, the government increases corporate taxes.
  • Unplanned inventories rise to new highs in the economy.

Question 2

The data in the first two columns below are for a private closed economy.

Macroeconomics

  • What is the equilibrium GDP for the private closed economy?
  • Including the international trade figures for exports and imports, calculating net exports, and determining the equilibrium GDP for a private open economy.
  • What is the size of the multiplier in this economy?
  • What will happen to equilibrium GDP if exports were $10 billion larger at each level of GDP?
  • What will happen to equilibrium GDP if exports remained at $15 billion, but imports rose to $15 billion?

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