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According to Kegnesian theory, what should have determined the actual amount of the response of real consumptioa expenditures to the small increase in real GDP?

Short Answer

Expert verified

As the solution, it move to consumption curve downwards.

Step by step solution

01

Introduction

The average variable cost curve, often known as the C+1+G+X curve, is drawn with the price level held constant. The HUKU method pushes consumers to save more and consume less in order to build up their savings. This will assist them in covering the costs of health-care services.

02

Conclusion

As a result of this system, the consumption curve will move downward, and the curve depicting C+1+G+Xwill shift downwards as well. As a result of the intersection of the AD curve with the C+1+G+X curve, yearly real GDP decreases.

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