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Hello. I am wondering about one question: let's say the output is defined: Y=c0 + c1(Y T)+I+G , the increase in G is led by
Hello. I am wondering about one question: let's say the output is defined: Y=c0 + c1(Y T)+I+G, the increase in G is led by the same increase in T.
So I would like to ask, whether it is correct to say that the output (Y) will be larger, because increase in G will increase the demand(Y) more than the increase in T recuses the demand(Y) (because of marginal propensity to consume c1 which is lower than 1)???
Thanks in advance!
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