Figure 13-5 -Refer to Figure 13-5. Let Y = Real GDP, AE

question 155

Multiple Choice

Figure 13-5
-Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of autonomous AE?

• A) $2,000 billion
• B) $3,000 billion
• C) $4,500 billion
• D) $8,000 billion

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Definitions:

Consumer Surplus

The difference in planned versus actual spending by consumers on a good or service.

Price Discrimination

A pricing strategy where a firm charges different prices for the same product or service to different consumers, based on their ability to pay, in order to maximize profits.

Privatizing

The act of moving control and ownership from the government to private entities, including businesses, enterprises, agencies, or public services.

Monopolizing

The act or process by which a single seller gains exclusive control over a market, limiting competition and often leading to higher prices for consumers.