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

question 136

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 the multiplier?

• A)0.75
• B)1.33
• C)4
• D)It depends on the ∆AE and the ∆Y since the multiplier formula is ∆AE ÷∆Y.

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Amount Of Commitment

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a socio-psychological phenomenon whereby individuals are less likely to take action or feel a sense of responsibility in the presence of a large group of people.