• Tăng chi tiêu của chính phủ về các dự án cơ sở hạ tầng có thể khuyến khích các công ty đầu tư, hoặc, mặt khác, có thể thay thế đầu tư tư nhân. • Tăng thuế sẽ làm giảm tiết kiệm và nhập khẩu cũng như tiêu thụ hàng hoá và dịch vụ trong nước. | Introduction to Economics ECO401 VU Give some other examples of changes in one injection or withdrawal that can affect others. A rise in government expenditure on infrastructure projects may encourage firms to invest or on the other hand may replace private investment. A rise in taxation will reduce savings and imports as well as consumption of domestic goods and services. A depreciation of the exchange rate will lead to increased exports an injection and decreased imports a withdrawal . This could encourage increased investment in the domestic economy. Higher savings will mean less total consumption including less expenditure on imports. Keeping Keynes s paradox of thrift arguments in mind is an increase in saving ever desirable Yes. If there is a problem of excess demand an increase in savings will reduce inflationary pressures. If investment increases over time an increase in savings will allow these increases to be financed without problems of rising interest rates or inflation problems which would have the effect of curtailing the investment. The present level of a country s exports is 12 billion investment is 2 billion government expenditure is 4 billion total consumer spending including on imports is 36 billion imports are 12 billion and expenditure taxes are 2 billion. The economy is currently in equilibrium. It is estimated that an income of 50 billion is necessary to generate full employment. The marginal propensity to save is . a Is there an inflationary or deflationary gap in this situation b What is the size of the gap Don t confuse this with the difference between Ye and Yf. c What would be an appropriate government policy to close this gap Injections J 12bn 2bn 4bn 18bn Domestic consumption Cd 36bn - 12bn - 2bn 22bn Expenditure on domestic goods E Cd J 18 22 40bn Multiplier 1 mps 1 4 a Deflationary gap. If the economy is in equilibrium then Y E. Thus Ye 40bn. But full employment is achieved at an income of 50bn. There is thus a deflationary
