d.How will the firms adjust if the full employment level of income is 1500? Is this an inflationary or deflationary gap? How much is the gap? e.What will be the effect on the equilibrium income if the autonomous consumption has increased to 150? f.What will be the effect on the equilibrium income if the marginal propensity to- consume reduces to 0.6?

d.How will the firms adjust if the full employment level of income is 1500? Is this an inflationary or deflationary gap? How much is the gap? e.What will be the effect on the equilibrium income if the autonomous consumption has increased to 150? f.What will be the effect on the equilibrium income if the marginal propensity to- consume reduces to 0.6?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter16: Economic Growth

Section: Chapter Questions

Problem 2E

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