ven the following consumption function, C = 400 + 0.75YD, where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000 Aactual output is less than potential output actual output is zero actual output is equal to potential output actual output is higher than potential outpu
ven the following consumption function, C = 400 + 0.75YD, where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000 Aactual output is less than potential output actual output is zero actual output is equal to potential output actual output is higher than potential outpu
Chapter9: The Keynesian Model In Action
Section: Chapter Questions
Problem 5SQP
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100%
Given the following consumption function, C = 400 + 0.75YD,
where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential
Aactual output is less than potential output
actual output is zero
actual output is equal to potential output
actual output is higher than potential output

Transcribed Image Text:Given the following consumption function, C = 400 + 0.75YD,
where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,
Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000
Select one from the following options.
actual output is less than potential output
actual output is zero
actual output is equal to potential output
actual output is higher than potential output
8.
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