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Your research into a nation has yielded the following information: *Keynesian Consumption Function is expressed as follows: C = Ca + [MPC] x Yd where
Your research into a nation has yielded the following information: *Keynesian Consumption Function is expressed as follows: C = Ca + [MPC] x Yd where Yd = disposable income = Y - T Ca = autonomous consumption (consumption when income is zero. Constant) = 450 MPC = marginal propensity to consume = 0.75 Also Gross investment (Ig) = $300 Government purchases (G) = $500 Net exports (NX) = $300 Taxes (T) = $500 (1) Substitute the values above into the equation: AE = A + [MPC (Y - T)] + I + G + NX to determine the abbreviated equation for aggregate expenditures (AE). AE = __(Q61)___ Y + ___(Q62)___. Q61 = ___________
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