If the demand for housing falls reducing planned investment, Ask an Expert

Economics

If the demand for housing falls, reducing planned investment by $75 billion, what is the effect on national income and output (GDP) (the consumption function is c = 50 + 0.7 (yd))

I know that reducing planned investment decreasing will reduce overall GDP. But I'm not sure what the significance of the consumption function is in this question?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91341181

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