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Difficulty: Medium Figure 13-4

question 41

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Difficulty: Medium Figure 13-4 Difficulty: Medium Figure 13-4   -Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I<sub>P</sub> = Planned Investment. Suppose AE = C + I<sub>P</sub>. I<sub>P</sub> is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If real GDP = $5,000 billion, what is the amount of aggregate expenditures? A)  $4,500 billion B)  $5,000 billion C)  $5,500 billion D)  $6,000 billion
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
IP = Planned Investment. Suppose AE = C + IP. IP is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If real GDP = $5,000 billion, what is the amount of aggregate expenditures?


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