Difficulty: Medium Figure 13-4

question 49

Multiple Choice

Difficulty: Medium Figure 13-4
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Suppose AE = C + I_P. I_P is autonomous and the consumption function is C = $1,000 billion + 0.5Y. What is the amount of consumption when real GDP is $6,000 billion?

• A) 1,000 billion
• B) 2,000 billion
• C) 3,000 billion
• D) 4,000 billion

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Definitions:

Game Sales

The total revenue generated from the sale of video games within a specific timeframe.

Weighted Average Model

A mathematical method that calculates the mean of a set of numbers, where some numbers contribute more significantly to the final average due to their respective weights.

Exponential Smoothing Model

A time series forecasting method that applies weighting factors which decrease exponentially to past observations.

Simple Exponential Smoothing

A time series forecasting method for univariate data that uses a weighted average of past observations, with the weights declining exponentially as the observations get older.