Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model. C = 400 + 0.8 I = 310 G = 140 = 400 + 0.8 (Y - T) T = 200, where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes. What is equilibrium income ($output), Ye ? Group of answer choices A) $5,050 B) $3,450 C) $6,900 D) $2,050 E) $5,450
Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model. C = 400 + 0.8 I = 310 G = 140 = 400 + 0.8 (Y - T) T = 200, where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes. What is equilibrium income ($output), Ye ? Group of answer choices A) $5,050 B) $3,450 C) $6,900 D) $2,050 E) $5,450
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 6SQ
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Question
Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model.
C = 400 + 0.8 I = 310
G = 140
= 400 + 0.8 (Y - T) T = 200,
where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes.
What is equilibrium income ($output), Ye ?
Group of answer choices
A) $5,050
B) $3,450
C) $6,900
D) $2,050
E) $5,450
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