For a closed economy with no government expenditure and taxes, the aggregate consumption function () is given by:
where is the disposable income.
If the total investment is 80, the equilibrium output is ______ (in integer)
GATE 2025 Question 40: Keynesian cross and the multiplier
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For a closed economy with no government expenditure and taxes, the aggregate consumption function (C) is given by: C = 100 + 0.75 Y_d where Y_d is the disposable income. If the total investment is 80, the equilibrium output is (in integer)
Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
What this question tests
This question is on Keynesian cross equilibrium, part of Keynesian cross and the multiplier in Macroeconomics.
How income is determined when output adjusts to planned spending, and what happens to unplanned inventories.
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