The intercept of the planned expenditure line is A) C₀+I+G+GX. B) (C₀ + I + G +GX) + (C_y(1-t) - IM_y)Y. C) (C_y(1-t) - IM_y)Y. D) C_y(1-t) - IM_y.

Question

Quizplus · Accepted Answer

The intercept of the planned expenditure line typically includes autonomous spending components that do not depend on the level of income (Y). These components usually consist of autonomous consumption (C), investment (I), government spending (G), and net exports (GX). Therefore, option A correctly represents the intercept as it sums up these autonomous components without including income-dependent terms.

The Intercept of the Planned Expenditure Line Is