Exhibit Keynesian Cross In this graph the equilibrium levels of income and

Exhibit keynesian cross in this graph the equilibrium

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7. (Exhibit: Keynesian Cross) In this graph, the equilibrium levels of income and expenditure are: A)Y1 and PE1. B)Y2 and PE2. C)Y3 and PE3. D)Y3 and PE4.
8. (Exhibit: Keynesian Cross) In this graph, if firms are producing at level Y3, then inventories will ______ inducing firms to ______ production. Page 29. In the Keynesian-cross model, if government purchases increase by 100, then planned expenditures ______ for any given level of income. 10. According to the Keynesian-cross analysis, if MPCstands for marginal propensity to consume, then a rise in taxes of hTwill: 11. In the Keynesian-cross model, if taxes are reduced by 250, then the equilibrium level of income: A) increases by 250. B) increases by more than 250. C) decreases by 250. D) increases, but by less than 250. 12. Tax cuts stimulate ______ by improving worker's incentive and expand ______ by raising households' disposable income. 13. The simple investment function shows that investment ______ as ______ increases. 14. Along any given IScurve: Page 3

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