a) State carefully the key assumptions underlying the Keynesian model of the economy. b) Using the "Keynesian Cross" diagram, show the impact of an exogenous shift in government spending, in an Keynesian economy and explain how it illustrates the role of the Keynesian multiplier.

a) State carefully the key assumptions underlying the Keynesian model of the economy. b) Using the "Keynesian Cross" diagram, show the impact of an exogenous shift in government spending, in an Keynesian economy and explain how it illustrates the role of the Keynesian multiplier.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

15.
a) State carefully the key assumptions underlying the Keynesian model of the
economy.
b) Using the "Keynesian Cross" diagram, show the impact of an exogenous shift in
government spending, in an Keynesian economy and explain how it illustrates the
role of the Keynesian multiplier.

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