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Question 43

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Use the following to answer questions .
Exhibit: Aggregate Expenditures and Real GDP 1 Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I<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
-(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = 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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