ECO211: Macroeconomics Assignment, UiTM, Malaysia How will the following situations affect the investment demand curve? Draw a diagram for each to illustrate
| University | Universiti Teknologi MARA (UiTM) |
| Subject | ECO211: Macroeconomics |
Question 1
How will the following situations affect the investment demand curve? Draw a diagram for each to illustrate your answer.
- A new type of manufacturing machine has been developed that is not only cheaper but also more energy efficient.
- To reduce the fiscal deficit, the government increases corporate taxes.
- Unplanned inventories rise to new highs in the economy.
Question 2
The data in the first two columns below are for a private closed economy.
- What is the equilibrium GDP for the private closed economy?
- Including the international trade figures for exports and imports, calculating net exports, and determining the equilibrium GDP for a private open economy.
- What is the size of the multiplier in this economy?
- What will happen to equilibrium GDP if exports were $10 billion larger at each level of GDP?
- What will happen to equilibrium GDP if exports remained at $15 billion, but imports rose to $15 billion?
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