In a Simple Economy in Which Prices Are Constant and with No

question 69

Multiple Choice

In a simple economy in which prices are constant and with no income taxes or imports, the slope of the AE curve is 0.8. In order to increase real GDP by $500 billion,

• A)autonomous expenditure needs to be increased by $100 billion.
• B)investment needs to be increased by $500 billion.
• C)consumption expenditure needs to be increased by $500 billion.
• D)saving needs to be reduced by $500 billion.

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