Consider a Keynesian model with consumption functionC = 100 + c(Y – T),              0<c<1where taxes T are given byT = 100 + tY,                   0<t<1 with marginal tax rate t. An increase in G will increase equilibrium output by the multiplierGroup of answer choices1/(1 – c – c*t)1/(1 – c + c*t)1/(1 – c*t)1/(1 – c)

In the Keynesian income-expenditure model which includes both a government sector and an external sector, an increase in autonomous consumption, government expenditure or investment combined with an increase in the marginal tax rateGroup of answer choiceswould increase the multiplier and reduce net exports, assuming the multiplier remains greater than onewould lead to a higher equilibrium level of income and an unchanged level of net exports while the multiplier would be reducedwould lead to an increase in net exports, assuming that the multiplier remains greater than onewould reduce the multiplier but, assuming this remains greater than one, equilibrium income would rise and net exports would fall.

Consider a simple Keynesian model with taxation. Suppose the marginal tax rate is t = 0.4 and the marginal propensity to consume is c = 0.66. Then an exogenous increase in investment demand of 100 units will:             Group of answer choicesIncrease equilibrium output by approximately 150 unitsIncrease equilibrium output by approximately 167 unitsIncrease equilibrium output by approximately 267 unitsIncrease equilibrium output by approximately 750 units

In the simple Keynesian model, which of the following statements is false? Group of answer choices An increase in the marginal propensity to save will reduce the level of income in the economy. The reduction in output from an increase in taxation is larger the smaller is the marginal propensity to consume. An increase in lump sum taxation accompanied by an increase in government spending of the same size will increase output. The equilibrium level of output does not depend upon the size of the money multiplier.

The multiplier in the Keynesian income-expenditure model, would be smallest to largest in order of magnitude inGroup of answer choicesthe open economy case with endogenous taxes, the closed economy case with endogenous taxes and the simple case without government or external sectorsthe open economy case with endogenous taxes, the simple case without government or external sectors and the closed economy case with endogenous taxesthe closed economy case with endogenous taxes, the simple case without government or external sectors and the open economy case with endogenous taxesthe closed economy case with endogenous taxes, the open economy case with endogenous taxes and the simple case without government or external sectors.

In the Keynesian income-expenditure model, equilibrium income is necessarily equal to a multiple ofGroup of answer choicesthe autonomous component of consumption, regardless of whether the economy is closed or openthe exogenous component of planned aggregate expenditurethe marginal propensity to consume minus the sum of the marginal tax rate and marginal propensity to importnone of the other alternatives are correct.