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  • 00 - Book - CH 17

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    Ranvir Singh
    2 views27 pages
    The document discusses the concept of crowding-out effect in economics. It explains that when the government increases spending (G), it can crowd out some private sector spending (C) through higher taxes or interest rates. To calculate the accurate multiplier effect, one needs to account for this crowding-out effect. The document shows the formula to calculate the crowding-out adjusted multiplier and uses an example to demonstrate how to estimate the change in equilibrium income after accounting for the crowding-out effect of increased government spending.

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    00_Book_Ch 17

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    The document discusses the concept of crowding-out effect in economics. It explains that when the government increases spending (G), it can crowd out some private sector spending (C) through higher taxes or interest rates. To calculate the accurate multiplier effect, one needs to account for this crowding-out effect. The document shows the formula to calculate the crowding-out adjusted multiplier and uses an example to demonstrate how to estimate the change in equilibrium income after accounting for the crowding-out effect of increased government spending.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    2 views27 pages

    00 - Book - CH 17

    Uploaded by

    Ranvir Singh
    The document discusses the concept of crowding-out effect in economics. It explains that when the government increases spending (G), it can crowd out some private sector spending (C) through higher taxes or interest rates. To calculate the accurate multiplier effect, one needs to account for this crowding-out effect. The document shows the formula to calculate the crowding-out adjusted multiplier and uses an example to demonstrate how to estimate the change in equilibrium income after accounting for the crowding-out effect of increased government spending.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 27

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    instead use S = Yd - C

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    please do
    this
    example for
    pee-rae-tiks

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    from 17.49

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    note that this is crowding-out-effect di vajah naal Y 'ch adjustment calculate karn da formula haiga

    Crowding out adjusted multiplier,

    Please note: my calculator says this is wrong!


    meaning rest of the calculations are also doubtfull
    meaning this factor has been crowded out from govt spending (deta G)

    multiplier
    (adjuster)

    ie multiplier effect (Gm) di


    vajah naal jinna delG
    vdheya c, udde cho
    crowding-out effect di vajah
    naal jinna delG ghateya --
    will give us the net effect of
    delG (govt expdr)

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    eqm income with
    crowding out effect

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