Answer to Question #157875 in Macroeconomics for Nthabiseng

Question

According to the assumptions of the simple Keynesian model, the economy only consists of the two sectors: households and firms.

There is ______________ relationship between government spending and total income.

A) a positive

B) no systematic

C) a negative

D) none of the above

Answer 1

The correct answer is A).

Answer:

There is a positive relationship between government spending and total income.