Business, 14.04.2020 18:18 Maria3737

Assume that in 2015, the following prevails in the Republic of Nurd: Government spending (G) = $0 Net taxes (T) = $0 Planned investment (I) = $25 Income (Y) = $200 Assume that households of Nurd consume 80 percent of their income; they save 20 percent of their income. In other words, MPC = 0.80 and MPS = 0.20. Thus, the consumption function and saving function are: C = 0.80Upper Y Subscript d and S = 0.20Upper Y Subscript d, where disposable income Upper Y Subscript d = YminusT At the current level of income (Y = $200), . A. leakages (S + T) fall short of injections (I + G) and income will increase in the coming months. B. leakages (S + T) exceed injections (I + G) and income will increase in the coming months. C. leakages (S + T) exceed injections (I + G) and income will fall in the coming months. D. leakages (S + T) equal injections (I + G) and income will remain unchanged in the coming months.

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Assume that in 2015, the following prevails in the Republic of Nurd: Government spending (G) = $0 Ne...

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