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Author Question: In the simple Keynesian model, if there is an autonomous investment falls by 20 billion and the MPC ... (Read 28 times)

Jkov05

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on: Jun 30, 2018
In the simple Keynesian model, if there is an autonomous investment falls by 20 billion and the MPC (b) is 0.60, the equilibrium income level will increase by
 
  a. 13.3 billion.
  b. 20 billion.
  c. 50 billion.
  d. 100 billion.

Question 2

In general terms describe trends in the inflation rate, considering the period since 1953 . How are these trends related to movements in the inflation rate over this period?
 
  What will be an ideal response?


Ahernandez18

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

Trend inflation rose steadily in the 1950s and 1960s, then rose dramatically during the 1970s. Beginning in the early 1980s, inflation fell precipitously until 1987, then has remained relatively constant around 2 since.


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