Answer to Question #60990 in Macroeconomics for moulid bilal

Question #60990
(1) Given a hypothetical consumption function of the form: Y = C + I0 + G0 ,C = α + β Yd Where: Yd = Y – T, Y = Income, T = Taxes Government spending and investment are exogenously determined at G and I respectively. Assuming this model represent a three sectors economy, determine Investment multiplier, Government spending multiplier and Tax multiplier. If there is an increase in marginal propensity to consumer, how will this affect the national income?
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Expert's answer
2016-07-29T10:09:03-0400
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