d. Draw a Keynesian-cross model. Label the output level of 1,400 and the equilibrium output level, and the corresponding levels of planned expenditure. e. What is (the Keynesian) government spending multiplier? f. How much does equilibrium income decrease when government spending decreases from 300 to 100? Suppose the natural rate of output is 1 600 By what percentage is the equilibrium output above or below the natural rate of output? According to
d. Draw a Keynesian-cross model. Label the output level of 1,400 and the equilibrium output level, and the corresponding levels of planned expenditure. e. What is (the Keynesian) government spending multiplier? f. How much does equilibrium income decrease when government spending decreases from 300 to 100? Suppose the natural rate of output is 1 600 By what percentage is the equilibrium output above or below the natural rate of output? According to
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 6SQ
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