Construct the multiplier model using the consumption function C = 100 + 0.80Y and an investment spending I =20 (assume no G and NX): a) How much is the expenditure multiplier? b) How much is the equilibrium output with the given C and I? c) If government will increase its spending G = 20, how much will be the change in Y?

Construct the multiplier model using the consumption function C = 100 + 0.80Y and an investment spending I =20 (assume no G and NX): a) How much is the expenditure multiplier? b) How much is the equilibrium output with the given C and I? c) If government will increase its spending G = 20, how much will be the change in Y?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 5SQP

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