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

question 4

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,then

• A) consumption expenditure needs to increase by $500 billion.
• B) saving needs to be reduced by $500 billion will lead to the increase of $500 billion.
• C) an increase in investment of $200 billion will lead to the increase of $500 billion.
• D) an increase in autonomous expenditure of $100 billion will lead to the increase of $500 billion.

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