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1.Equilibrium income is reached when injections equal withdrawals. true/false

2.Increases in

government spending _____ equilibrium income, and increases in taxes _____ equilibrium income.

a.decrease; decrease

b.increase; decrease

c.decrease; increase

d.increase; increase

3.Which of the following equations is NOT true at equilibrium in the simple Keynesian model?

a.Y = C + S

b. AE = C + I

c. I = S

d. AE > Y

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Question 1 b.increase; decrease national income increases with increase in expenditure but decreases with... View the full answer

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