Macro I HW 4 Answer Key
•1. Plea explain the relationship among income, Capital (asts) and Capital value.
•2Suppo c=a+b*(y-t), y = c+i, plea calculate the tax multiplier, that is, if t decreas one unit, how many units will y ri?
•Decreasing one unit of tax, (1) will increa b units of c, and thus will increa b units of y, (2) then will increa units of c, thus units of y, ……
•Tax multiplier by decreasing one unit of t = + + +⋯=
•3The Blessings of Destruction (破坏）suggests how much better off economically we all are in war tha
n in peace. The believers e almost endless benefits in enormous acts of destruction. For instance, some of them argued that the Germans or the Japane had a postwar advantage over the Americans becau their old plants, having been destroyed completely by bombs during the war, they could replace them with the most modern plants and equipment and thus produce more efficiently and at lower costs than the Americans with their older and half-obsolete plants and equipment. Does the logic make n in this example? Why? What is your opinion of the Blessings of Destruction?
•If the Destruction is truly a blessing, then why not blow up the city?
