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4. Suppose for the Keynesian model. Y = C(Y T) + I(r) + G + NX C(Y T) = C0 + C1(Y T) (Represents graphically
4. Suppose for the Keynesian model. Y = C(Y T) + I(r) + G + NX C(Y T) = C0 + C1(Y T) (Represents graphically using the Keynesian model each of the following subsections) What happens to spending and production if: a) The government plans to spend more. (Red) b) The government decides to reduce taxes. (Green) c) Investors decide to make a smaller investment. (Blue) d) Suppose that the real interest rate decreases, that is, r1 < r. (Pink)
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