Consider the Following Multiplier Model Diagram

question 38

Essay

Consider the following multiplier model diagram:
For each of the following,draw a picture to show what would happen to the equilibrium level of income in the economy.
(a)Consumers,in their delight over the Dow Jones Industrial Average reaching 15,000,decide to go on a spending spree.
(b)Between 2000 and 2009 the euro increased in value by over 30% relative to the U.S.dollar.
(c)The prospect that the Social Security system will not be viable beyond the year 2017 has many,many people saving more of their income than ever before.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which is often a minimal amount that bears no relation to its market price.

Common Stock

Shares representing ownership in a corporation, entitling holders to a portion of the company's profits through dividends and voting rights.

Acquisition

The process of obtaining control of another corporation or asset, through purchase or merger.

Consolidated Land

A combination of parcels of land owned by a single entity, especially after acquisition or as a result of business consolidation, for accounting or development purposes.