The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 20

Multiple Choice

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc) = 0.80
∙ net tax rate (t) = 0.15
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. FIGURE 22-3
-Refer to Figure 22-3.What is total autonomous expenditure?

• A)$300
• B)$325
• C)$650
• D)$1000
• E)$1975

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Definitions:

Transportation

Refers to the movement of goods or people from one location to another, typically involving vehicles such as trucks, ships, and planes.

Dabbawalas

A lunchbox delivery and return system in Mumbai, India, known for its low cost and high reliability.

Milk Run

A distribution strategy that involves the regular collection of goods from multiple suppliers in a single journey, optimizing transportation efficiency.

Transportation Cost

The expenses associated with moving goods or services from one location to another.