15. Suppose there is an increase in autonomous consumption. • How would this shock impact a...

15. Suppose there is an increase in autonomous consumption.

• How would this shock impact a standard classical model? Written discussion and graphs are both needed for full credit. Be sure to mention what happens to W P , Y, N, P, r, C, S, P rS, P uS

Note: Assume that change in investment does not impact the capital stock.

Expectations are as follows:

• Capture the timing in your written discussion

• If a curve shifts, explain why/economic intuition

• If a market is in disequilibrium, explain how it returns to equilibrium

Expert Solution

Rahul Sunny answered 2 years ago

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15. Suppose there is an increase in autonomous consumption. • How would this shock impact a...

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