If the consumption function is given by and planned investment is 150, government spending is 50, and T is 100, then equilibrium income is
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1 mark, −0.33MacroeconomicsKeynesian cross and the multiplierKeynesian cross equilibriumModerateabout 2 min
UoH 2014 Question 88: Keynesian cross and the multiplier
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If the consumption function is given by C = 100 + 0.6(Y-T) and planned investment is 150, government spending is 50, and T is 100, then equilibrium income is (A) 600 (B) 750 (C) 400 (D) 350
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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