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. (solve three tasks) Graph planned expenditure as a function of income.
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. (solve three tasks) Graph planned expenditure as a function of income.
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 4TY
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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. (solve three tasks)
- Graph planned expenditure as a function of income.
- What is the equilibrium level of income?
- If government purchases increase to 125, what is the new equilibrium income?
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