The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 20

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 level of autonomous consumption?

• A)$0
• B)$325
• C)$350
• D)$650
• E)$1000