Which of the following saving functions corresponds to an investment multiplier of 5?
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4 marks, −1MacroeconomicsKeynesian cross and the multiplierThe investment and expenditure multiplierModerateabout 1 min
CUET-PG 2020 Question 52: Keynesian cross and the multiplier
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Which of the following saving functions corresponds to an investment multiplier of 5? (A) S = -28 + 0.25y (B) S = -40 + 0.75y (C) S = -5 + 0.2y (D) S = -75 + 0.5y
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What this question tests
This question is on The investment and expenditure multiplier, part of Keynesian cross and the multiplier in Macroeconomics.
Why a change in autonomous spending changes income by a larger amount, and what sets its size.
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