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Derive the multiplier for investment

      

Derive the multiplier for investment

  

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Dana
143.
Y=C + I
Y = a+ ßY + Io + ?Y
Y- ßy – ?Y= 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 19:58


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