Table 13-2 -Refer to Table 13-2. Let Y = Real GDP, AE

question 12

Multiple Choice

Table 13-2

-Refer to Table 13-2. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Consider a simple economy that is made up of only two sectors, households and firms, and that all investment is autonomous. Further, disposable personal income = real GDP. Suppose autonomous investment rises by $50 billion. In the short run, this will cause

• A) an increase in equilibrium AE of $100 billion, a shift to the right of the aggregate demand (A
• D) curve of $100 billion, and an increase in Y of more than $100 billion.
• B) an increase in autonomous AE of $50 billion, a shift to the right of the AD curve of $100 billion, and an increase in Y of less than $100 billion.
• C) an increase in autonomous AE of $50 billion, a shift to the right of the AD curve of $100 billion, and an increase in Y of more than $200 billion.
• D) an increase in equilibrium AE of $50 billion, a shift to the right of the AD curve of $300 billion, and an increase in Y of less than $300 billion.

---

Definitions:

Learning Problems

Difficulties in acquiring knowledge or skills to the expected level, often requiring specialized interventions.

Communication Skills

Communication skills involve the ability to convey or share ideas and feelings effectively, including listening, speaking, reading, and writing.

Social Reality

The spectrum of beliefs, institutions, norms, and behaviors that characterize the social life of a group or society, perceived as objective by its members.