Solved

Difficulty: Medium Figure 13-4

Question 89

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>, and I<sub>P</sub> is autonomous. If potential real GDP is $7,000 billion, what must happen to planned investment for the economy to reach its potential real GDP? A) I<sub>P</sub> must be decreased by $1,000 billion B) I<sub>P</sub> must be increased by $1,000 billion C) I<sub>P</sub> must be decreased by $500 billion D) I<sub>P</sub> must be increased by $500 billion
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
IP = Planned Investment. Suppose AE = C + IP, and IP is autonomous. If potential real GDP is $7,000 billion, what must happen to planned investment for the economy to reach its potential real GDP?


A) IP must be decreased by $1,000 billion
B) IP must be increased by $1,000 billion
C) IP must be decreased by $500 billion
D) IP must be increased by $500 billion

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q83: Consider a simple economy that is made

Q84: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q85: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q86: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q87: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q88: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q90: Difficulty: Medium Figure 13-4 Difficulty:</p></div><svg width=

Q91: If real GDP increases from $2,000 to

Q93: Figure 13-5 Figure 13-5 </p></div><svg width=

Q94: Figure 13-5 Figure 13-5 </p></div><svg width=

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents