What is the relationship between the marginal and average propensity to consume in the standard Keynesian consumption function and permanent income hypothesis? What are the assumptions required to in order to derive the accelerator investment function? Why does investment take place according to this model?

What is the relationship between the marginal and average propensity to consume in the standard Keynesian consumption function and permanent income hypothesis? What are the assumptions required to in order to derive the accelerator investment function? Why does investment take place according to this model?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 6SQ

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