Keynesian View of AD

Yad = C + I + G + NX

Downward Sloping AD

P _, M/P _, i _, I _, NX _, Yad _

Shift in AD

M _, M/P _, i _, I _, NX _, Yad _

_ AD shifts right

C _ or G _ or T _ or NX _: Yad _

_ AD shifts right

Complete Crowding Out

G _, i _ _ C _, I _, NX _ _

C + I + G + NX = Yad unchanged

Partial crowding out: private spending down, but not fully offsetting G _

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