Suppose consumption is described by C=a+b(Y-T), planned investment is I, and planned governmen spending and taxes are G and T, respectively. Keeping taxes constant, by how much should the government increase its spending G if it wants to increase equilibrium income by X in the Keynesian cross model? O a. (1-b)X O b. X/(1-b)

Suppose consumption is described by C=a+b(Y-T), planned investment is I, and planned governmen spending and taxes are G and T, respectively. Keeping taxes constant, by how much should the government increase its spending G if it wants to increase equilibrium income by X in the Keynesian cross model? O a. (1-b)X O b. X/(1-b)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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