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.

---

Definitions:

Agency Request

A formal appeal or demand made by an agency for something to be given, supplied, or performed.

Facilities

Buildings, services, equipment, etc., provided for a particular purpose, such as healthcare, education, or sport.

Business Firm

An organization engaged in commercial, industrial, or professional activities, either for profit or non-profit.

Independent Regulatory Agencies

Independent regulatory agencies are federal bodies created by Congress to enforce and regulate specific areas of economic activity, operating with some degree of independence from executive control.