39 The Keynesian consumption function is C = 15 + 0:6Y ; combined with C +...
39 The Keynesian consumption function is C = 15 + 0:6Y ; combined with C + 10 = Y (I = 10), an increase in government spending causes Y to rise by a multiplier of
a. 1.5.
b. 2.0.
c. 2.5.
d. 0.
59 If income is the "interest áow" on Wealth, then
a. income is greater than Wealth;
b. income is equal Wealth;
c. income is less than Wealth;
d. income is unrelated to Wealth.
Homework Answers
Ans.39- 2.5
Multiplier = 1/1- mpc = 1/1-0.6 = 1/0.4 =2.5
Hence correct answer us C.
For question no. 59 I am unable to understand the meaning of word written after interest in "interest áow" . Write its meaning in comment box so that I can answer question no.59 too.
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39 The Keynesian consumption function is C = 15 + 0:6Y ;
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