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consumption C = 50 + 0.75 (Y - T) Investment I = 150 - 10r Money demand L(Y,r) = Y - 50r governmment spending G = 250 taxes T = 200 money supply M = 750 QUESTION 1 - refer to the information in the table For the Simple Keynesian/Keynesian cross model, for which: r = 0 (i) use the relevant set of equations to solve for equilibrium level of income. What is the equilibrium level of consumption? Graphically illustrate and explain (ii) what happens if planned investment exceeds 150? Is less than 150? Illustrate and explain

consumption C = 50 + 0.75 (Y - T) Investment I = 150 - 10r Money demand L(Y,r) = Y - 50r governmment spending G = 250 taxes T = 200 money supply M = 750 QUESTION 1 - refer to the information in the table For the Simple Keynesian/Keynesian cross model, for which: r = 0 (i) use the relevant set of equations to solve for equilibrium level of income. What is the equilibrium level of consumption? Graphically illustrate and explain (ii) what happens if planned investment exceeds 150? Is less than 150? Illustrate and explain

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consumption C = 50 + 0.75 (Y - T) Investment I = 150 - 10r Money demand L(Y,r) = Y - 50r governmment spending G = 250 taxes T = 200 money supply M = 750 QUESTION 1 - refer to the information in the table For the Simple Keynesian/Keynesian cross model, for which: r = 0 (i) use the relevant set of equations to solve for equilibrium level of income. What is the equilibrium level of consumption? Graphically illustrate and explain (ii) what happens if planned investment exceeds 150? Is less than 150? Illustrate and explain
Transcribed Image Text:consumption C = 50 + 0.75 (Y - T) Investment I = 150 - 10r Money demand L(Y,r) = Y - 50r governmment spending G = 250 taxes T = 200 money supply M = 750 QUESTION 1 - refer to the information in the table For the Simple Keynesian/Keynesian cross model, for which: r = 0 (i) use the relevant set of equations to solve for equilibrium level of income. What is the equilibrium level of consumption? Graphically illustrate and explain (ii) what happens if planned investment exceeds 150? Is less than 150? Illustrate and explain
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