Question

using the simple Keynesian(J.W) model to assess the implication for equilibrium GDP and level of serving at an increase in the serving function. what happens to the level of saving? what would happen to equilibrium income if there is a sustained rise in private investment spending?

Answer 1

An increase in the serving function cause the increase in the level of saving. The equilibrium level of income will increase if there is a sustained rise in private investment­spending.