Consider the following multiplier model diagram:
(a)What is the value of equilibrium income?
(b)Demonstrate graphically and explain verbally the impact on equilibrium income of an increase in government spending of 100.
(c)Explain why the change in equilibrium income exceeds the change in government expenditures in your answer for part (b).

Question

Consider the following multiplier model diagram:
  (a)What is the value of equilibrium income?
(b)Demonstrate graphically and explain verbally the impact on equilibrium income of an increase in government spending of 100.
(c)Explain why the change in equilibrium income exceeds the change in government expenditures in your answer for part (b).

Quizplus · Accepted Answer

The Answer of Consider the following multiplier model diagram:
  (a)What is the value of equilibrium income?
(b)Demonstrate graphically and explain verbally the impact on equilibrium income of an increase in government spending of 100.
(c)Explain why the change in equilibrium income exceeds the change in government expenditures in your answer for part (b).

Consider the Following Multiplier Model Diagram