In the Keynesian cross, assume that the consumption function is given by C = 200 + 0.75 (Y - T). Planned investment is 100; government purchases and taxes are both 100. d. What level of government purchases is needed to achieve an income of 1,600?

In the Keynesian cross, assume that the consumption function is given by C = 200 + 0.75 (Y - T). Planned investment is 100; government purchases and taxes are both 100. d. What level of government purchases is needed to achieve an income of 1,600?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 6QP

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Question

In the Keynesian cross, assume that the consumption function is given by
C = 200 + 0.75 (Y - T).
Planned investment is 100; government purchases
and taxes are both 100.

d. What level of government purchases is needed
to achieve an income of 1,600?

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