Aggregate expendiftures ($ millions) 3) AE AE AE 1,000 600 270 45° A 1,000 1,500 Aggregate output ($ millions) a) Referring to Figure above, write the equation for aggregate expenditure AE1 by explaining how to find the intercept and slope. b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A & B? Show your work. c) Assuming the economy's aggregate expenditure line is AE1, calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work. d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work.

Aggregate expendiftures ($ millions) 3) AE AE AE 1,000 600 270 45° A 1,000 1,500 Aggregate output ($ millions) a) Referring to Figure above, write the equation for aggregate expenditure AE1 by explaining how to find the intercept and slope. b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A & B? Show your work. c) Assuming the economy's aggregate expenditure line is AE1, calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work. d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 5E: A firm experienced the demand shown in the following table. *Unkown future value to be forecast Fill...

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