You Are Given the Following Information About the Canadian Economy

question 20

Multiple Choice

You are given the following information about the Canadian economy.Autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion.The marginal propensity to consume is 0.7 and net taxes are $250 billion.Net taxes are assumed to be constant and not vary with income.Exports are $500 billion and imports are $450 billion.
The equation of the AE curve in billions of dollars is _______ .Equilibrium expenditure is _______ .

• A)AE = 0.7Y + 375; $536 billion
• B)AE = 0.7 + 375Y; $1,250 billion
• C)AE = 0.7Y + 300; $1,000 billion
• D)AE = 0.7Y + 375; $1,250 billion
• E)AE = 0.7Y + 1,275; $4,250 billion

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Definitions:

Physical Controls

Security measures that prevent unauthorized access to assets, including locks, security cameras, and secure areas.

Blank Checks

Blank checks are checks that are not filled out, having no specified amount of money written on them, but signed and ready to be used for any amount.

Safeguarded

In the context of finance and accounting, safeguarded refers to measures or controls implemented to protect assets from loss, theft, or unauthorized use.

Cash Disbursements

The funds that are paid out by a business, typically documented in a cash disbursements journal.