When real GDP is zero, investment is $2.0 trillion, government expenditure is $1.5 trillion, exports are $1.5 trillion, and consumption expenditure is zero. Aggregate expenditure (trillions of 2012 dollars) 7.0- Draw a line that shows autonomous expenditure. Label it A. 6.0- What is consumption expenditure minus imports, which varies with real GDP called? 5.0- O A. actual expenditure 4,0- OB. domestic expenditure OC. aggregate expenditure 3.0- O D. induced expenditure 2.0- 1.0- 0.0- 0.0 1.0 2.0 3.0 4.0 5.0 6.0 8.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.

When real GDP is zero, investment is $2.0 trillion, government expenditure is $1.5 trillion, exports are $1.5 trillion, and consumption expenditure is zero. Aggregate expenditure (trillions of 2012 dollars) 7.0- Draw a line that shows autonomous expenditure. Label it A. 6.0- What is consumption expenditure minus imports, which varies with real GDP called? 5.0- O A. actual expenditure 4,0- OB. domestic expenditure OC. aggregate expenditure 3.0- O D. induced expenditure 2.0- 1.0- 0.0- 0.0 1.0 2.0 3.0 4.0 5.0 6.0 8.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.8P

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In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. Exports are $500 billion and imports are $450 billion. Assume that net taxes and imports are autonomous and price level is fixed. a)What is the consumotion function? b)What is the equation of the aggregate expenditure curve? c)Calculate equilibrium expenditure. d)Calculate the multiplier. e)If investment decreases to $150 billion, what is the change in equilibrium expenditure ?
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