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Difficulty: Medium Figure 13-4

Question 6

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Difficulty: Medium Figure 13-4 Difficulty: Medium Figure 13-4 -Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JI<sub>P</sub> = Planned Investment. Suppose AE = C + I<sub>P</sub>, and I<sub>P</sub> is autonomous. Which of the following statements is true? A) The multiplier = 0.5 B) The multiplier = (1 − 0.5) /1 = 0.5 C) The multiplier = 2 D) The multiplier = ∆AE ÷ ∆Y
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JIP = Planned Investment. Suppose AE = C + IP, and IP is autonomous. Which of the following statements is true?


A) The multiplier = 0.5
B) The multiplier = (1 − 0.5) /1 = 0.5
C) The multiplier = 2
D) The multiplier = ∆AE ÷ ∆Y

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