mgeb05

Instructions: You can submit an individual or group assignment.  If you submit a group assignment, there must be no more than FIVE students in your group (coming from the section of MGEB05 this term) and you just have to submit ONE copy. A PENALTY OF 10% OF THE TOTAL MARKS will be imposed if you FAIL TO DO EITHER OF THE FOLLOWING (20% if you fail to do both): 1)Submit this page as your cover page (complete the information above) 2)STAPLE your ass

18 Other / Other University Of Toronto / mgeb05 18 Nov 2020

Question 1 The economy is currently in its long-run equilibrium. However, there are evidences indicating that there is an increase in (autonomous) consumption. a) According to the long-run classical model of a closed economy, what would happen to the economy’s output, real interest rate and investment? Support your answer by an appropriate diagram. b) Suppose the government finds the change in real interest rate in part (a) undesirable and wants

18 Other / Other University Of Toronto / mgeb05 18 Nov 2020