|Principles of Macroeconomics (Eco 200-800)||SUNY-Oswego|
|Solutions will be posted or distributed by Fri., April 21, 2000||Ranjit Dighe|
I. SERGEANTS, BOOK HER AND TAKE HER AWAY
A. Case & Fair (5th edition), Chapter 9: #1, 4, 6, 7
B. Case & Fair, Chapter 10: #2,
4, 6, 8
-- For the last two questions of Chapter 10, #6, you might try looking at Table B-79 of the online version of the 1999 Economic Report of the President, at
II. THE JOY OF SPENDING
a. What is the balanced-budget multiplier?
b. Explain what a former student of mine probably meant when he said the balanced-budget multiplier should be re-named the "tax and spend" multiplier.
a. What is the paradox of thrift?
b. Relate the paradox of thrift to the idea of trying to reduce a government budget deficit by cutting spending or raising taxes during a recession.