Answer to Question #320063 in Macroeconomics for george

Question

1.      What is the core discussion of the Keynesian cross?

 

2.      Why are actual and planned expenditure simultaneously analysed?

 

3.      Why is the multiplier effect taken into consideration in the Keynesian cross?

 

4.      How does the Keynesian cross model, explains, the functions of Fiscal policy?

 

5.      Why are MPC and the ΔG critical variables in the multiplier effect?

Answer 1

1.     It discusses the equilibrium level of GDP at a point where the economy aggregate expenditure is equal to output produced

2.     To determine what was budgeted and what has been spent in reality

3.     Because it is used to measure the impacts of investment change on the final output of an economy

4.     It is used by the government to influence the economic aggregate demand level in an attempt to achieve price stability, economic growth, and full employment which are economic objectives.

5.     They show the multiplier effect on economic spending