Autonomous consumption spending

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Reference no: EM13948388

Use the model in qu. 1 to verify the following propositions. Take Y(0) =3000

(i) A rise in autonomous consumption spending or a rise in invest- ment or a rise in government spending by 50 leads to the same impact on equilibrium income and toidentical adjustment paths for Y(t).

(ii) For a rise in investment of 50, and a lower value for ;\ of 0.4, there is no di erence in the equilibrium value of income, but income takes longer to reach this new equilibrium.

Reference no: EM13948388

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