2.8 Consider the following model Y = C+I+G C =a-bT +b(1-k)Y G=G D=G-T-KY An increase in the marginal propensity to consume would A. shift/rotate the C+1+G line downwards B. shift the C+I÷G line upwards with no change in private investment C. shift the C+I+G line upwards and increases private investment due to increase in output D. shift the C+I÷G line upwards but the effect on private consumption is ambiguous E. None of the above

2.8 Consider the following model Y = C+I+G C =a-bT +b(1-k)Y G=G D=G-T-KY An increase in the marginal propensity to consume would A. shift/rotate the C+1+G line downwards B. shift the C+I÷G line upwards with no change in private investment C. shift the C+I+G line upwards and increases private investment due to increase in output D. shift the C+I÷G line upwards but the effect on private consumption is ambiguous E. None of the above

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 5.10P

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