In the IS model, aggregate consumption is given by C =?c7 + 7 (Y – 7) where ž denotes the marginal propensity to consume out of current income

Economics Nov 28, 2020

In the IS model, aggregate consumption is given by C =?c7 + 7 (Y – 7) where ž denotes the marginal propensity to consume out of current income. A one dollar increase in government purchases leads to a dollar increase in GDP. ž/(1 – 7) d. #/(1+x) b. 1/(1 – ) 1/(1+x) 1 e.

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