National income equilibrium
Question 1
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Equilibrium In each of the following questions, assume that the economy is in equilibrium at X. Identify the new equilibrium following the changes given below: |
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Consumer confidence rises.
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There is better use of new technology leading to cost efficiencies by UK firms.
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There is a downturn in UK exports to Europe.
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There is a rise in household savings.
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Interest rates fall.
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Consumer confidence falls triggering a fall in business confidence.
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Oil prices rise, and at the same time unemployment falls.
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There is a general rise in business taxes, and a rise in imports relative to exports.
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Government spending on education rises.
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Banks reduce their lending to households and firms reduce their investment in new technology.