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Difficulty: Medium Figure 13-4

Question 98

Multiple Choice

Difficulty: Medium Figure 13-4 Difficulty: Medium Figure 13-4 -Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I<sub>P</sub> = Planned Investment. Suppose AE = C + I<sub>P</sub>. I<sub>P</sub> is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If I<sub>P</sub> = $2,000 billion, what is the equilibrium level of real GDP? A) $4,500 billion B) $6,000 billion C) $7,500 billion D) $9,000 billion
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
IP = Planned Investment. Suppose AE = C + IP. IP is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If IP = $2,000 billion, what is the equilibrium level of real GDP?


A) $4,500 billion
B) $6,000 billion
C) $7,500 billion
D) $9,000 billion

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