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Consider the Following Aggregate Expenditure Function: AE = $300 Billion

Question 83

Multiple Choice

Consider the following aggregate expenditure function: AE = $300 billion + (0.87) Y. Assuming that we have no government, no international trade and desired investment is autonomous and is equal to $56 billion, then which of the following is the correct statement of the consumption function?


A) C = $244 billion + (0.13) Y
B) C = $244 billion + (0.87) Y
C) C = $300 billion + (0.13) Y
D) C = $356 billion + (0.87) Y
E) C = $356 billion + (0.13) Y

Correct Answer:

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