6.What are the determinants of consumption according the
Keynesian view? Write the Keynesian consumption function and
explain its meaning in detail (15 points).
What are the determinants of consumption according the
Keynesian view? Write the Keynesian consumption function and
explain its meaning in detail (15 points).
What is the consumption function? Explain the different elements
in the Keynesian consumption function. What role does the
consumption function play in the determination of equilibrium
income in the Keynesian system?
What is the role of taxes according to the Keynesian (Circuit
theory) view? Are they a source of revenue for the government? How
do they destroy money?
a) With the aid of a consumption function, highlight the main
determinants of consumption.
b) “International trade is beneficial to developing countries.”
Do you agree? Discuss your arguments with the support of at least
one international trade theory.
c) As a trade specialist, outline the policies which the
government can use to promote international trade.
what are three conjectures of keynesian consumption function?
why economists worry about consumption functions? is it autonomous
or disposable income that matters for economy?
Use the equation C=a+bY to motivate a discussion of the
Keynesian consumption Function. Graph this function and then show
the effect of at least four variables on aggregate consumption
expenditures. You must provide a complete explanation and diagram
of each case of how each variable influences the level of
consumption.
Consider the following Keynesian economy.
Consumption function: Ct = 20 + 0.7(Y-T)
Investment Function: It = 42 −100r
Government Spending: Gt = 50
Tax Collections: Tt = 50
Real Money Demand Function: (Mt/Pt) = 6Yt − 2000Rt
Money Supply: = Mt = 2800
Price Level: Pt = 2
i. Derive the equation for the IS curve expressing r as a
function of Y only. For interest rates ranging from 0-8, graph the
IS curve.
ii. Derive the equation for the...