The chapter emphasizes that two different groups of people in the economy operate simultaneously and independently of each other. Who are these groups, and why is it important to emphasize that they operate in this way?
Answer to relevant QuestionsWhat happens to the level of national income when intended investment is greater than actual investment? Professor Arvind Jaggi asks his students at Franklin and Marshall College: "Building schools is not only good for students but for many non students as well." Who are these nonstudents? Explain why they benefit. Use your imagination to create the first five rounds of a $1,000 change in aggregate expenditure. Show the final effect on national income when MPS = 0.10. Why is the balanced budget multiplier always equal to 1? What is/are the difference(s) between changes in real GDP and changes in real per capital GDP? How has world real per capita GDP changed over the past two millennia? Compare the per capita growth achievements by region.
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