You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow: Q.4.1 Calculate the value of autonomous spending. (3) Q.4.2 Calculate the value of the multiplier. (3) Q.4.3 Calculate the equilibrium level of income. (3)
You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow: Q.4.1 Calculate the value of autonomous spending. (3) Q.4.2 Calculate the value of the multiplier. (3) Q.4.3 Calculate the equilibrium level of income. (3)
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 5SQP
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Question
You are given the following information about a closed economy with no government:
Consumption = 115 + 0.6Y
Investment = 550
Use the above information to answer the questions that follow:
Q.4.1 Calculate the value of autonomous spending. (3)
Q.4.2 Calculate the value of the multiplier. (3)
Q.4.3 Calculate the equilibrium level of income. (3)
Q.4.4 Is the equilibrium level of income also the full employment level of income? Explain
your answer.
(3)
Q.4.5 Identify any three non‐income determinants of consumption. (3)
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