Difficulty: Medium Figure 13-4

Multiple Choice

Difficulty: Medium Figure 13-4
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment. Suppose AE = C + I_P, and I_P is autonomous. If the level of real GDP equals $5,000 billion, and if there are no changes in the consumption function or in planned investment, then we can expect that, in the next period, real GDP will

A) rise.
B) remain unchanged.
C) fall.
D) fall, but only if there is an offsetting change in autonomous consumption.