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Use the Following to Answer Questions

Question 214

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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. If the level of real GDP equals $7,000 billion, and if there are no changes in the consumption function or in planned investment, then we 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.
-(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. If the level of real GDP equals $7,000 billion, and if there are no changes in the consumption function or in planned investment, then we 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.

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