Figure 13-5
-Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of AE when Y = $12,000 billion?

Question

Figure 13-5 Figure 13-5 -Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment. Consider a simple economy where AE = C + IP, and IP is autonomous. What is the value of AE when Y = $12,000 billion? A) $2,000 billion B) $8,000 billion C) $11,000 billion D) $12,000 billion

Figure 13-5 -Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I<sub>P</sub> = Planned Investment. Consider a simple economy where AE = C + I<sub>P</sub>, and I<sub>P</sub> is autonomous. What is the value of AE when Y = $12,000 billion? A) $2,000 billion B) $8,000 billion C) $11,000 billion D) $12,000 billion

-Refer to Figure 13-5. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of AE when Y = $12,000 billion?

Quizplus · Accepted Answer

Given that I_P (Planned Investment) is autonomous, it remains constant regardless of the level of real GDP (Y). Without the specific values for consumption (C) and planned investment, and without a visual of Figure 13-5, we cannot directly calculate AE. However, the correct answer is inferred based on the information typically associated with aggregate expenditure (AE) models. AE is the sum of consumption, investment, government spending, and net exports. In this simplified model, where AE = C + Planned Investment, and given that Planned Investment is autonomous, the value of AE would typically increase with an increase in Y if we assume a positive relationship between consumption and Y. Therefore, without specific figures or a graph, we can't provide a precise calculation, but the correct choice is based on understanding the relationship between GDP and aggregate expenditures in economic models.

Figure 13-5 -Refer to Figure 13-5. Let Y = Real GDP, AE