(a) Using a basic Keynesian income determination model, describe the effects of the following changes, assuming that money demand is infinitely elastic: (i) an increase in government expenditure (ii) an increase in the marginal propensity to save (iii) a decrease in export demand
(a) Using a basic Keynesian income determination model, describe the effects of the following changes, assuming that money demand is infinitely elastic: (i) an increase in government expenditure (ii) an increase in the marginal propensity to save (iii) a decrease in export demand
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics
Section: Chapter Questions
Problem 10CQ
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