Q. In the simple Keynesian model, if the tax function is given by T=0.15Y and the consumption function is C= 50 + 0.7 YD then a 10-unit ncrease in government spending would increase equilibrium income by (Solved)

1. 10 units

2. 11.2 units

3. 22.4 units

4. 30 units

  • b. 11.2 units
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