Economics · Macroeconomics
In a simple Keynesian model, how is the aggregate demand function related to the consumption function (assuming investment and government spending are autonomous)? I. They have the same slope, which is the Marginal Propensity to Consume (MPC). II. The aggregate demand function is parallel to the consumption function.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Only II
- 2Only I
- 3Both I and II✓
- 4Neither I nor II
Correct answer
Both I and II
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