Introduction The objective of this chapter is to move from theory to empiric. Specially, we shall study how macroeconomic policies can be applied to solve practical macroeconomic problems
Chapter 7: The Analysis of Price Determination Gang Gong Copyright Notes: This electronic file is only used as a lecture notes for the student in this class. It is not allowed to be used for presentation anywhere else without the permission from the author
Introduction The aim of this chapter is to study how output is determined in Keynesian framework. The analysis in this chapter is often named multiplier analysis
Question 1 Suppose in an open economy the consumption function take the form C=100+0.8 Tax is the proportion of income with the tax rate to be given by 0. 2. Meanwhile import depends on the domestic income with the function given by