The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 16

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

• A)AE = 1000 + (0.68)Y
• B)AE = 1000 + (0.80)
• C)AE = 1000 + (0.80)Y + 0.15 Y_D
• D)AE = 1975 + (0.68)Y
• E)AE = 1975 + (0.65)Y

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Definitions:

Lipid

A group of naturally occurring molecules that includes fats, waxes, sterols, fat-soluble vitamins (such as vitamins A, D, E, and K), monoglycerides, diglycerides, triglycerides, phospholipids, and others.

Nucleic Acid

A complex organic substance present in living cells, especially DNA or RNA, whose molecules consist of many nucleotides linked in a long chain, fundamental for the transmission of genetic information.

Protein

Large molecules composed of one or more long chains of amino acids, essential for the structure, function, and regulation of the body's cells, tissues, and organs.

Cyclic AMP

Cyclic AMP (cAMP) is a second messenger important in many biological processes, including the regulation of metabolism, gene transcription, and cell signaling.