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Please only answer d, e and f 4) Keynesian Cross: Consumption: C = a + b(Y -T); Marginal propensity to consume b = 0.6 Autonomous

Please only answer d, e and f

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4) Keynesian Cross: Consumption: C = a + b(Y -T); Marginal propensity to consume b = 0.6 Autonomous consumption: a = 400; Tax: T = 200; Planned Investment: Ip = 200; Government spending: G = 500 a) What is the equilibrium level of GDP? (1) b) What is the level of consumption when the level of income equals 2500? (1) c) If the level of production in the economy equals 3000, what is the level of saving and the unmtended inventory investment? (1) d) Compare unintended inventory investment in question a) and c), what will the firms do? (1) e) Based on your answer about the firms' behavior, discuss the different perspectives on the relationship between demand and supply from the neoclassical and the Keynesian economics. (2) f) Suppose the government increases its spending from 500 to 600 (G = 600). What is the new equilibrium level of Y and C? (1) What is the autonomous expenditure multiplier? (1)

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