An increase in planned investment spending causes

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85) An increase in planned investment spending causes aggregate output to (a) increase by an amount equal to the change in investment spending. (b) increase by an amount less than the change in investment spending. (c) increase by an amount greater than the change in investment spending. (d) decrease by an amount less than the change in investment spending. Answer: C Question Status: Previous Edition
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840 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 86) In the simple Keynesian model, the equilibrium condition is that 87) Keynes believed that changes in autonomous spending were dominated by changes in 88) Keynes believed that changes in autonomous spending were dominated by 89) After witnessing the events in the Great Depression, Keynes took the view that an economy would continually suffer major output fluctuations because of the volatility of (a) autonomous spending, particularly planned investment spending. (b) induced spending, particularly consumer expenditures. (c) autonomous spending, particularly consumer expenditures. (d) autonomous spending, particularly government expenditures. Answer: A Question Status: Previous Edition Chapter 23 The Keynesian Framework and the ISLM Model 841 Figure 23-2
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