In the Keynesian-Cross Analysis, If the Consumption Function Is Given

question 89

Multiple Choice

In the Keynesian-cross analysis, if the consumption function is given by C = 100 + 0.6(Y - T) , and planned investment is 100, G is 100, and T is 100, then equilibrium Y is:

• A)350.
• B)400.
• C)600.
• D)750.

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Definitions:

Past Saving

The accumulation of previously saved money or assets that can be used for future investments or expenditures.

Investment

The allocation of resources, such as capital, to generate income or profit.

Standard of Living

A measure of the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a certain geographic area.

Municipal Bonds

Municipal bonds are debt securities issued by states, cities, counties, and other governmental entities to fund day-to-day obligations and to finance capital projects such as building schools, highways, or sewer systems.