21.2 Equilibrium National Income FIGURE 21-3

question 155

Multiple Choice

21.2 Equilibrium National Income FIGURE 21-3
-Refer to Figure 21-3.Consider the simplest macro model with no government and no foreign trade,and the aggregate expenditure function AE = C + I.If there was zero autonomous expenditure and the marginal propensity to consume was equal to one,then the AE function would be

• A)steeper than the 45-degree line.
• B)above the 45-degree line at all points.
• C)below the 45-degree line at all points.
• D)coincident with the 45-degree line.
• E)flatter than the 45-degree line.

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