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

question 71

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, I_P is autonomous
And the consumption function is given by C = $1,000 billion + 0.75Y. What is the value of equilibrium real GDP (Y*) ?

• A) $2,000 billion
• B) $6,000 billion
• C) $7,500 billion
• D) $8,000 billion

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Definitions:

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Karen Horney

a German psychoanalyst known for her theory of neurotic needs and her contributions to the psychology of women and self-theory.