The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 8

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) = 0.75
• net tax rate (t) = 0.20
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. FIGURE 22-2
Refer to Figure 22-2.What is total autonomous expenditure?

• A)$0
• B)$75
• C)$100
• D)$175
• E)$250

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