Figure 13-5 -Refer to Figure 13-5. Let Y = Real GDP, AE

question 121

Multiple Choice

Figure 13-5
-Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of AE when Y = $12,000 billion?

• A) $2,000 billion
• B) $8,000 billion
• C) $11,000 billion
• D) $12,000 billion

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Definitions:

Book Value Method

An accounting technique where assets are valued in the balance sheet at their original cost minus any accumulated depreciation.

Stockholder's Equity

The residual interest in the assets of the corporation after deducting liabilities, representing the ownership interest of shareholders.

Non-interest-bearing Note

A financial instrument or loan that does not accrue interest over its life, meaning the borrower repays only the principal amount.