Let AE = Aggregate Expenditures, C = Consumption, I_P =

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, JG =Government Purchases. Consider a simple aggregate expenditures model, where
JAE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is

A) 1.33
B) 2.5
C) 5
D) 15