The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 105

Multiple Choice

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.80
• net tax rate (t) = 0.15
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. FIGURE 22-3
Refer to Figure 22-3.What is the equilibrium national income in this economy?

• A)$1470.59
• B)$3125.00
• C)$1975.00
• D)$5000.00
• E)$6171.87

Understand the mathematical approaches to and limitations of aggregate planning.

Identify the key components required for developing an aggregate plan.

Understand complex aggregate planning techniques and their challenges.

Recognize the typical planning horizon for aggregate planning and its implications.

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