Macmillan Learning new Y= $ Aggregate Demand I-Work It Out Question 1 In the Keynesian cross model, assume that the consumption function is given by C=$170+0.7(Y-T) Planned investment is $100; government purchases and taxes are both $100. c. If government purchases increase to $115, what is the new equilibrium income? What is the multiplier for government purchases?

Macmillan Learning new Y= $ Aggregate Demand I-Work It Out Question 1 In the Keynesian cross model, assume that the consumption function is given by C=$170+0.7(Y-T) Planned investment is $100; government purchases and taxes are both $100. c. If government purchases increase to $115, what is the new equilibrium income? What is the multiplier for government purchases?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter18: The Keynesian Model

Section: Chapter Questions

Problem 9SQP

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In a keynesian model it is assumed that the consumption function is given by C= 2000 + 0.75 (Y-T) and the planned investment is 1,000 government purchases and taxes are both of those and formulate and draw a graph of planned expenditure as a function of income What is the equilibrium level in the part above If the government purchases increased by 1250 what is the equilibrium income With the aid of a algebra prove that a balanced budget multiplier is always equals to 1
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