Consider the Following Aggregate Expenditure Function: AE = $300 Billion

question 83

Multiple Choice

Consider the following aggregate expenditure function: AE = $300 billion + (0.87) Y. Assuming that we have no government, no international trade and desired investment is autonomous and is equal to $56 billion, then which of the following is the correct statement of the consumption function?

• A) C = $244 billion + (0.13)Y
• B) C = $244 billion + (0.87)Y
• C) C = $300 billion + (0.13)Y
• D) C = $356 billion + (0.87)Y
• E) C = $356 billion + (0.13)Y

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Definitions:

Explore

To travel through or investigate an unfamiliar area or subject to learn more about it.

Strange Situation

A procedure developed by Mary Ainsworth in the 1970s to assess attachments styles in children by observing their reactions to separations and reunions with their caregiver.

Reunions

Events that bring together individuals who have been apart, often family members or friends, to reconnect and share experiences.

Separations

Instances of physical or emotional distancing between individuals who have previously been connected, such as in relationships or familial ties.