uppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model.               C = 400 + 0.8                                            I = 310                                                                               G = 140                = 400 + 0.8 (Y - T)                                T = 200,               where C is the consumption function, (Y - T)  is disposable income, I is investment, G is government spending, and T is taxes If government spending increased by $80, equilibrium Y would Group of answer choices A) increase by $400. B) decrease by $160. C) increase by $80. D) increase by $320. E) increase by approximately $106.67.

ENGR.ECONOMIC ANALYSIS
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Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model.

 

            C = 400 + 0.8                                            I = 310

                                                                              G = 140

               = 400 + 0.8 (Y - T)                                T = 200,

 

            where C is the consumption function, (Y - T)  is disposable income, I is investment, G is government spending, and T is taxes

If government spending increased by $80, equilibrium Y would

Group of answer choices
A) increase by $400.
B) decrease by $160.
C) increase by $80.
D) increase by $320.
E) increase by approximately $106.67.

 

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