Answered: 1. If planned investment (I) goes up by…

1. If planned investment (I) goes up by 20 initially and is sustained at this higher level, an increase of output of 20 will not restore equilibrium. Explain why??

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 8DQ

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1. If planned investment (I) goes up by 20
initially and is sustained at this higher level, an
increase of output of 20 will not restore
equilibrium. Explain why??

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