Use the Following to Answer Questions

question 197

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures and Real GDP 2
-(Exhibit: Aggregate Expenditures and Real GDP 2) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Consider a simple economy where AE = C + I_P, I_P is autonomous and the consumption function is given by C = $1,000 billion + 0.75Y. What is the value of consumption when real GDP is $6,000 billion?

• A) $1,000 billion
• B) $2,500 billion
• C) $4,500 billion
• D) $5,500 billion

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Definitions:

American General

A high-ranking officer in the United States Army, Marine Corps, or Air Force, often commanding large military units or holding senior administrative positions.

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The capital and largest city of Mexico, known for its rich history, culture, and significant influence in Latin America.

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The 16th President of the United States, who led the country during the Civil War and issued the Emancipation Proclamation.

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