Question
Consider the following information on this macroeconomy: C=2500+0.6YdIa=1000Ga=1200X-Ma= - 300 i. Use all the data to draw the Keynesian model for this economy. Starting with
Consider the following information on this macroeconomy:
C=2500+0.6YdIa=1000Ga=1200X-Ma=-300
i. Use all the data to draw the Keynesian model for this economy. Starting with the C-function, then add and label each additional function and end with AE (example AE=).Insert all possible values on the Y -axis and label each function as you add the layers of spending.Label 'Ye" on your graph
ii. How can the rate of return cause the dollar value of Ia in the function above to decrease? In a different color, show on your graph for (i) what will happen to 'Ye" as a result.
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