In the Keynesian-cross model, if government purchases increase by 100, then planned expenditures for any given level of income.
A)increase by 100.
B)increase by more than
C)100. decrease by 100.
D)increase, but by less than 100.

Question

Quizplus · Accepted Answer

In the Keynesian-cross model, an increase in government purchases directly increases planned expenditures by the same amount, assuming no other changes.

In the Keynesian-Cross Model, If Government Purchases Increase by 100