In a Certain Economy, the Components of Aggregate Spending Are

question 34

Multiple Choice

In a certain economy, the components of aggregate spending are given by: C = 500 + 0.8(Y - T) - 300r
I = 200 - 400r
G = 200
NX = 10
T = 150
Given the information about the economy above, what would be the impact on aggregate expenditures of a one-percentage-point increase in the real interest rate (r) ?

• A) Aggregate expenditures would increase by 35 units.
• B) Aggregate expenditures would decrease by 700 units.
• C) Aggregate expenditures would decrease by 35 units.
• D) Aggregate expenditures would decrease by 7 units.

---

Definitions:

Neurons

Nerve cells that are the basic building blocks of the nervous system, responsible for receiving sensory input, processing information, and transmitting signals.

Increase

An increase refers to a situation where there is a growth or rise in a particular quantity or measure, such as an increase in temperature or population.

Zeitgebers

Environmental cues like light and temperature that regulate the biological clock of organisms, influencing sleep and wakefulness cycles.

Sunrise

The time of day when the upper limb of the Sun appears on the horizon in the morning.