Q3. Use the Keynesian cross model to predict the impact on equilibrium GDP of the following. In each case, state the direction of the change and give a formula for the size of the impact. a. An increase in government purchases b. An increase in taxes c. Equal-sized increases in both government purchases and taxes
Q3. Use the Keynesian cross model to predict the impact on equilibrium GDP of the following. In each case, state the direction of the change and give a formula for the size of the impact. a. An increase in government purchases b. An increase in taxes c. Equal-sized increases in both government purchases and taxes
Chapter23: The Aggregate Expenditure Model
Section: Chapter Questions
Problem 1P
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Q3. Use the Keynesian cross model to predict the impact on equilibrium
a. An increase in government purchases
b. An increase in taxes
c. Equal-sized increases in both government purchases and taxes
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