The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 6

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.Which of the following equations describes the aggregate expenditure function for this economy?

• A)AE = 250 + (0.6)Y
• B)AE = 225 + (0.75)Y
• C)AE = 250 +(0.15)Y
• D)AE = 75 + (0.75)Y + (0.2)Y_D
• E)AE = 250 +(0.75)Y + (0.2)Y_D

---

Definitions:

REM Sleep Behaviour Disorder

A sleep disorder characterized by the acting out of dreams during the REM (Rapid Eye Movement) stage of sleep.

Dream

During sleep, a person experiences a flow of images, thoughts, and emotional reactions in their mind.

Flail

A tool consisting of a handle attached to a striking head by a flexible joint, used historically for threshing grain or in a weapon context.

Somnambulism

Somnambulism, also known as sleepwalking, is a disorder that involves walking or performing other activities while appearing to be asleep.