Will the outcome reveal the size of the multiplier

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Reference no: EM13242738

Advance Analysis Assume that the consumption schedule for a private open economy is such that consumption C=50+0.8 Y. Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant at Ig=30 and X=10 . Recall also that, in equilibrium the real output produced (Y) is equal to aggregate expenditures: Y=C+Ig+Xn B. What happens to equilibrium Y if Ig changes to 10, will the outcome reveal the size of the multiplier?

Reference no: EM13242738

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