Consider the Following Aggregate Expenditure Function: AE = $500 Billion

question 99

Multiple Choice

Consider the following aggregate expenditure function: AE = $500 billion + (0.75) Y.Assuming no government,no international trade,and desired investment is autonomous and equal to $120 billion,then which of the following is the correct statement of the consumption function?

• A)C = $620 billion + (0.75)Y
• B)C = $620 billion + (0.25)Y
• C)C = $500 billion + (0.75)Y
• D)C = $500 billion + (0.25)Y
• E)C = $380 billion + (0.75)Y

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