a) Give a brief outline of the Keynesian theory of output and employment and discuss the...
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a) Give a brief outline of the Keynesian theory of output and employment and discuss the main criticism leveled against this theory. (10 marks) (6 Marks) b) Discuss any three factors that determine the natural rate of unemployment. c) Suppose the following functions are given:- Commodity Market Consumption function: C = 10 +0.5Y Investment function: 1 = 200- 20001 Money market Transaction demand for money: MDT = 0.5Y Speculative demand for money: Mps = 150 - 1500€ Money supply: MS = 150 Required: i. 11. Determine equilibrium levels of income and interest rate for the economy. Using a well labelled diagram, illustrate equilibrium conditions in part (i) (6marks) (4marks) iii. If money supply increases by 50, what would be the effect on the equilibrium level of income and rate of interest? (4marks) a) Give a brief outline of the Keynesian theory of output and employment and discuss the main criticism leveled against this theory. (10 marks) (6 Marks) b) Discuss any three factors that determine the natural rate of unemployment. c) Suppose the following functions are given:- Commodity Market Consumption function: C = 10 +0.5Y Investment function: 1 = 200- 20001 Money market Transaction demand for money: MDT = 0.5Y Speculative demand for money: Mps = 150 - 1500€ Money supply: MS = 150 Required: i. 11. Determine equilibrium levels of income and interest rate for the economy. Using a well labelled diagram, illustrate equilibrium conditions in part (i) (6marks) (4marks) iii. If money supply increases by 50, what would be the effect on the equilibrium level of income and rate of interest? (4marks)
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a The Keynesian theory of output and employment developed by economist John Maynard Keynes focuses on the relationship between aggregate demand and aggregate supply in determining the level of output ... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
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