Use a Saving-Investment Diagram to Explain What Happens to Saving,investment,and

question 16

Essay

Use a saving-investment diagram to explain what happens to saving,investment,and the real interest rate in each of the following scenarios in a closed economy.
(a)Current output rises due to a temporary productivity increase.
(b)The tax code changes so that business firms face higher tax rates on their revenue (offset by other lump-sum tax changes so there's no overall change in tax revenue).
(c)The government increases spending temporarily for a one-year project to turn mercury into gold.
(d)The average educational level rises,inducing an increase in the future marginal productivity of capital.

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Definitions:

Academic Orientalism

A critique of Western scholarship about the Eastern world, emphasizing the stereotypical representation and cultural generalization of the "East" by the "West."

Institutional Orientalism

The systematic depiction and treatment of Eastern societies as exotic, backward, and uncivilized, ingrained within Western institutions.

Colonialism

The policy or practice of acquiring full or partial political control over another country, exploiting it economically, and settling it with colonists.

Imperialism

The policy of extending a country's power and influence through colonization, use of military force, or other means.