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Use the Following to Answer Questions

Question 216

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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 and Y* = equilibrium real GDP. Suppose AE = C + I<sub>P</sub>, I<sub>P</sub> is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If firms produced a real GDP greater than the Y*, A) AE would be greater than real GDP. B) AE would fall short of real GDP. C) actual investment would be less than I<sub>P</sub>. D) there would be an excess demand for real GDP.
-(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment and Y* = equilibrium real GDP. Suppose AE = C + IP, IP is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If firms produced a real GDP greater than the Y*,


A) AE would be greater than real GDP.
B) AE would fall short of real GDP.
C) actual investment would be less than IP.
D) there would be an excess demand for real GDP.

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