Tuesday, September 15, 2009

Unit 2: Increasing govt expenditure in China

This BBC clip shows how an economic stimulus by the govt can influence the economy

http://news.bbc.co.uk/1/hi/world/asia-pacific/8256073.stm

a) Using the AD formula and an AD/AS diagram, explain the effect of major projects like this on the Chinese economy
b) What evidence is there in the video that this project will have a positive multiplier effect in the economy

No comments: