Consider a closed economy described with a Keynesian cross. The consumption is C = 500 + .75
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Question:
Consider a closed economy described with a Keynesian cross. The consumption is C = 500 + .75 (Y – T). Planned investment is 400, government spending is 300, and taxes are 300.
1. If Y is 2000, what is the planned expenditure? How is inventory changing (accumulating or not accumulating)?
2. b. What is Y equilibrium?
3. What is equilibrium consumption, private savings, public savings, and national savings?
4. How much does equilibrium income decrease when G is reduced to 200? What is the public spending multiplier?
Related Book For
Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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