When C=20 + 0.5Y, and change in investment (I) = 400, find change in income (y).
Tap an option to check your answer.
JNU SSS 2021 Question 36: Keynesian cross and the multiplier
Answer and worked solution
Checking your account…
Plain-text version
When C=20 + 0.5Y, and change in investment (Δ I) = 400, find change in income (Δ y). (A) 800 (B) 13.5 (C) 23 (D) 4.5
Also written as: When C=20 + 0.5Y, and change in investment (Delta I) = 400, find change in income (Delta y).
Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
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.
TestStop has 24 past-paper questions on this subtopic.
Similar questions from other papers
- If consumption is C = 40 + 0.75y, Investment is I = 60, The output, consumption and saving at the equilibrium will be _ respectively
- What is the formula of Super Multiplier?
- Which of the following is not correct about the effect of taxes on income and output?
- 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…
- An economy saves 25% of its national income and invests a sum of Rs.1000 each year. The economy starts with Rs.10,000 as its initial national income. Assume that the…
Question from the JNU SSS 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.