Using the Keynesian Cross, If Autonomous Consumption Is $100, Government

question 50

Multiple Choice

Using the Keynesian cross, if autonomous consumption is $100, government spending and taxes are $200, investment is $100, net exports are zero, and the marginal propensity to consume is 0.8, find equilibrium output.

• A) $720
• B) $1,000
• C) $1,200
• D) none of the above

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