Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $250 billion and when it is $500 billion: Real Net Exports (Billions of Dollars) Government Purchases Net Exports Aggregate Expenditure 400 350 On the following graph, use the blue curve to plot investment as a function of disposable income: 300 250 200 150 100 Consumption Investment 50 0 Disposable Income 0 $250 billion $350 billion $200 billion $200 billion $125 billion $875 billion $500 billion $375 billion $200 billion $200 billion $115 billion $890 billion 100 200 300 400 500 600 700 800 900 1000 Real Disposable Income (Billions of Dollars) Investment

Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $250 billion and when it is $500 billion: Real Net Exports (Billions of Dollars) Government Purchases Net Exports Aggregate Expenditure 400 350 On the following graph, use the blue curve to plot investment as a function of disposable income: 300 250 200 150 100 Consumption Investment 50 0 Disposable Income 0 $250 billion $350 billion $200 billion $200 billion $125 billion $875 billion $500 billion $375 billion $200 billion $200 billion $115 billion $890 billion 100 200 300 400 500 600 700 800 900 1000 Real Disposable Income (Billions of Dollars) Investment

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.1P

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