Get premium membership and access questions with answers, video lessons as well as revision papers.

Derive the multiplier for induced investment

      

Derive the multiplier for induced investment

  

Answers


Dana
Y=C + I
Y = a+ ßY +Io
Y- ßy= a + Io
(1 – ß) Y = a + Io
Hence Y = (a + Io) / (1 – ß)
Y = (a + Io) / (1 – ß) + ?I / (1 – ß)
?Y = ?I / (1 – ß)
?Y = 1 / (1 – ß)* ?I
Thus ?Y/ ?I = 1 / (1 – ß)

Dana05 answered the question on July 18, 2019 at 19:56


Next: What factors cause a shift in the IS curve
Previous: Derive the multiplier for investment

View More Economics Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions