Consider a Simple Economy That Is Made Up of Three

question 8

Multiple Choice

Consider a simple economy that is made up of three sectors: households, firms, and government. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous.
In this case, the slope of the aggregate expenditures curve is

• A) 1.
• B) infinity (since the AE curve is horizontal).
• C) equal to the marginal propensity to consume.
• D) the value of the multiplier.

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Definitions:

Financial Position

A snapshot of the assets, liabilities, and equity of a business at a given point in time, illustrating the company's financial health.

Changes in Equity

Adjustments in a company’s equity during a specific period due to factors like earnings, dividends, or changes in share capital.

Total Assets

Total Assets refer to the sum of all current and non-current assets owned by a company, representing its resources with economic value.

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The federal agency responsible for the administration of tax laws for the Government of Canada, as well as for various social and economic benefit and incentive programs.