According to the Keynesian-Cross Analysis, When There Is a Shift

question 35

Multiple Choice

According to the Keynesian-cross analysis, when there is a shift upward in the government-purchases schedule by an amount ∆G and the planned expenditure schedule by an equal amount, then equilibrium income rises by:

• A)one unit.
• B)∆G.
• C)∆G divided by the quantity one minus the marginal propensity to consume.
• D)∆G multiplied by the quantity one plus the marginal propensity to consume.