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Use the IS-LM Model to Determine the Effects of Each

question 43

Essay

Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real wage,employment,output,the real interest rate,consumption,investment,and the price level.
(a)Tougher immigration laws reduce the working-age population.
(b)There's increased volatility in the prices of stocks and bonds.
(c)The government tries to achieve tax equity by an increase in the corporate tax rate.
(d)Increased computerization reduces stock market brokerage costs.


Definitions:

Y-intercept

The y-intercept is the point where a line or curve intersects the y-axis of a coordinate system, representing the value of the dependent variable when the independent variable is zero.

Independent Variables

Variables in an analysis that are manipulated or categorized to determine their effect on dependent variables.

Sample Size

The number of observations or elements included in a sample drawn from a population for analysis.

Estimated Multiple Regression

A statistical technique that estimates the relationship between a dependent variable and multiple independent variables.

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