In the Simple Keynesian Model,if the Tax Function Is Given

question 17

Multiple Choice

In the simple Keynesian model,if the tax function is given by T = 0.15Y and the consumption function is C = 50 + 0.7Y_D then a 10-unit increase in government spending would increase equilibrium income by

• A)10 units.
• B)11.2 units.
• C)22.4 units.
• D)30 units.
• E)none of the above

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved in instinct and mood control and the basic emotions (fear, pleasure, anger).

Pleasure

A subjective feeling of enjoyment or satisfaction derived from sensory or emotional experiences.

Semantic Memory

A type of long-term memory that involves the storage of general knowledge and facts about the world, independent of personal experience.

Telephone Numbers

Sequences of digits assigned to telephones or other devices for the purpose of establishing telephone calls to those devices.