Answer to Question #198413 in Economics for Bilal ahmed

Question

What are parameter in keynsians economic model ,C =a+b(y-t) and T=d+ty

Also give their signs and economic meanings

Answer 1

a - autonomous consumption, the value of which does not depend on the size of the current disposable income;

b - marginal propensity to consume;

Y - income;

T - tax deductions;

(Y - T) - disposable income (income after tax deductions).