Answer to Question #15164 in Economics of Enterprise for Babu

Question

Using the simple Keynesian model to assess the implications for equilibrium GDP and the level of savings of an increase in the savings function. What would happen to equilibrium income if there is a sustained rise in private investment spending.

Answer 1

Using the simple Keynesian model to assess the implications for equilibrium GDP and the level of savings of an increase in
the savings function, we can say, that Paying off debt = savings increase and Consumption decrease.