What is the multiplier for government spending

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Consider a closed economy to which the Keynesian cross analysis applies. Consumption is given by the equation C=200+2/3(Y-T). Planned investment is 300, as are government spending and taxes. If Y is 1,500 what is planned spending? What is inventory accumulation or decumulation? Should equilibrium Y be higher or lower than 1,500? What is equilibrium Y? What are equilibrium consumption, private saving, public saving, and national saving? How much does equilibrium income decrease when G is reduced to 200? What is the multiplier for government spending?

Reference no: EM13218230

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