Consider the Following Aggregate Expenditure Function: AE = $300 Billion

question 26

Multiple Choice

Consider the following aggregate expenditure function: AE = $300 billion + (0.87) Y.Assuming that we have no government,no international trade and desired investment is autonomous and is equal to $56 billion,then which of the following is the correct statement of the consumption function?

• A)C = $356 billion + (0.87)Y
• B)C = $356 billion + (0.13)Y
• C)C = $244 billion + (0.87)Y
• D)C = $244 billion + (0.13)Y
• E)C = $300 billion + (0.13)Y

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