Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 6SQ
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1. Show that equilibruim level of income is at a point where consumption plus investment schedules intersect the 45
degree line.
2. Suppose the level of autonomous investment in an economy is K200,000 and the consumption function is given below as c = 80+0.8Y, what will be the equilibrium level of income.
4.if MPcC is 0.8, what will be the increase in the level of income if investment is increased to K400,000.
5. What increase in investment is needed to raise the income by K4000, if MPC is 0.75? How much will be the increase in consumption and saving due to this increase in income.
3. Given the consumption level C= 50 + 75Y, if we assume autonomous
investment is K200,000 at what level of income will savings become equal to
investment?
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