Given the basic Keynesian model-as a starting point: Y = C + I + G C = a + b Yd

Question

Given the basic Keynesian model-as a starting point: Y = C + I + G C = a + b Yd I = f (i) I ? f (Y) ie., MPI* = 0 G = Go Tx = Txo * MPI to represent marginal propensity of invest (NOT import) Disregard the monetary sector (LM curve) Assuming an MPC of 0.8, which of the following is not true? a $10 billion increase in investment will increase income by $50 billion a $5 billion tax cut will raise aggregate income by $25 billion the MPS must be 0.2 a $20 billion increase in government spending will increase income by $100 billion

Explanation / Answer

I donno if u observed it but the equations , u put up in the above question seem to display some special characters like the question mark and so,,,so please check it again and upload the question properly

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