Which of the following statements about the Keynesian framework are accurate?a)Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca is consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consumeb) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter.c) Keynes also posited that Investment spending was a function of expectations and the interest rate.d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determined by expectations of future sales and costs.e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest.f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the project and the lower market rate of interest. If they have more cash than needed for these projects, they will lend out the balance to others and receive the market rate of interest, rather than invest in projects that yield a lower return.g) All the above 0. Which of the following statements about the Keynesian framework are accurate?(a) Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca isO consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consume.(b) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter.(c) Keynes also posited that Investment spending was a function of expectations and the interest rate.(d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determinedby expectations of future sales and costs.(e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest.(f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the projectand the lower market rate of interest. If they have more cash than needed for these projects, they will lend out thebalance to others and receive the market rate of interest, rather than invest in projects that yield a lower return.(g) All the above

The Keynesian framework is an economic theory developed by economist John Maynard Keynes that…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Which of the following statements about the Keynesian framework are accurate?

a)Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca is consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consume

b) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter.

c) Keynes also posited that Investment spending was a function of expectations and the interest rate.

d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determined by expectations of future sales and costs.

e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest.

f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the project and the lower market rate of interest. If they have more cash than needed for these projects, they will lend out the balance to others and receive the market rate of interest, rather than invest in projects that yield a lower return.

g) All the above

0. Which of the following statements about the Keynesian framework are accurate?
(a) Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca is
O consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consume.
(b) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter.
(c) Keynes also posited that Investment spending was a function of expectations and the interest rate.
(d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determined
by expectations of future sales and costs.
(e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest.
(f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the project
and the lower market rate of interest. If they have more cash than needed for these projects, they will lend out the
balance to others and receive the market rate of interest, rather than invest in projects that yield a lower return.
(g) All the above

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