Following the Keynesian cross, if there is a sudden tidal wave of investment, then it must be true that:a.Total output will not change at all in the short run because of the crowding out effect.O b. The planned expenditure line becomes steeper than the 45-degree line.Planned spending will be larger than income at the existing output level; inventories will bedepleted fast, and producers must step up production.O d. The planned expenditure line becomes steeper than the 45-degree line.

as we know that AD=C+I in two sector closed model. where I stand for investment and is positively…

Following the Keynesian cross, if there is a sudden tidal wave of investment, then it must be true that: O a. Total output will not change at all in the short run because of the crowding out effect. O b. The planned expenditure line becomes steeper than the 45-degree line. O C. Planned spending will be larger than income at the existing output level; inventories will be depleted fast, and producers must step up production. O d. The planned expenditure line becomes steeper than the 45-degree line.

Following the Keynesian cross, if there is a sudden tidal wave of investment, then it must be true that: O a. Total output will not change at all in the short run because of the crowding out effect. O b. The planned expenditure line becomes steeper than the 45-degree line. O C. Planned spending will be larger than income at the existing output level; inventories will be depleted fast, and producers must step up production. O d. The planned expenditure line becomes steeper than the 45-degree line.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer b is not correct I am again says answer b is not correct
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