Solved

In the Simple Keynesian Model with No Government and Foreign

Question 84

Multiple Choice

In the simple Keynesian model with no government and foreign sectors,assume that full employment occurs at an output of $10,000.With a marginal propensity to consume of 0.5 and equilibrium output at $9,600,by how much will investment spending have to increase to move the economy to full employment?


A) $100
B) $400
C) $200
D) $50

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q12: Which of the following is NOT a

Q63: From year to year, consumption fluctuates more

Q79: Which of the following statements about the

Q80: Which is TRUE about differences in savings

Q104: If the marginal propensity to consume increases,

Q118: Aggregate expenditures are equal to consumption plus

Q141: Classical economists thought that prices, wage rates,

Q167: The simple Keynesian model ignores<br>A) the government.<br>B)

Q205: A luxury car manufacturer is contemplating investing

Q243: In the simple Keynesian model, if people