4. Keynesian cross and Keynesian multiplier: In the Keynesian cross, assume that the consumption function is given by C - 100 +0.5 (Y-T) Planned investment is 75; government purchases and taxes are both 100. a) Graph planned expenditure as a function of income. b) What is the equilibrium level of income? c) If government purchases increase to 110, what is the new equilibrium income? d) How big is the Keynesian government purchases multiplier in this example? e) What level of...
Qui Quesson 42 Using the Keynesian Cross (PAE) Model, explain the effect of an increase in the exchange rate (e is denoted as foreign over home currency) on the short run equilibrium output. Graphical analysis must be provided along with the intuition to receive fuill credit. Not yet Points out of 600 Flag question
Q2. In the Keynesian cross model, equilibrium in the economy is obtained where planned spending equals actual spending. (a) Explain what planned spending and actual spending are (b) Graphically present the equilibrium condition of the economy in the Keynesian cross model. (c) Explain how the economy adjusts to equilibrium if the economy finds itself with a level of planned spending which is less than actual spending (3 marks) (d) Explain why an increase in government spending leads to a greater...
A decrease in government spending reduces output more in the Keynesian Cross model than in the IS‐LM model. Explain why this is true.
Queston 41 Not yet Using the Keynesian Cross (PAE) Model, explain (graphically and intuitively) how the government could react using fiscal policy to close a recessionary gap. Graphical analysis must be provided along with the intuition to receive full credit Points out of 600 Y Fag question
please explain? 1) In the closed economy Keynesian-cross model, a decrease in the interest rate _ planned investment spending and _ the equilibrium level of income. A. decreases: increases B. increases; decreases _C. decreases: decreases _D. increases; increases 2) Exhibit: Steady-State Consumption, Production and Depreciation Function c*, * , ** The Golden Rule level of the capital-labor ratio is: A k*A. B. above k*A but below k*B. _C. k*B. D. above k*B
2. Chapter 11, The Keynesian Cross (5 points): • In the Keynesian cross, assume that the consumption function is given by: C = 200 +0.75(Y - T) Planned investment is 100, government purchases and taxes are both 100. (a) Graph planned expenditure as a function of income. (b) What is the equilibrium level of income? (c) If government purchases increase to 125, what is the new equilibrium income? (d) What level of government purchases is needed to achieve an income...
Use Keynesian Fiscal Theory only (Keynesian Cross of positive AD and AS) to answer the following questions: Would you recommend a Balance Budget Multiplier method to bring the economy from a recession to non-inflationary full employment level? Why? PLS HELP ME, Need to show my professor I can respond to his question confidently! thank you so much in advance
Use the Keynesian cross to predict the impact on equilibrium GDP of an increase in government purchases
In the Keynesian cross, assume that the consumption function is given by C=200+0.75 (Y-T) Planned investment is 100; government purchases and taxes are both 100. a. Graph planned expenditure as a function of income. b. What is the equilibrium level of income?