Solved

Difficulty: Medium Figure 13-4

Question 44

Multiple Choice

Difficulty: Medium Figure 13-4 Difficulty: Medium Figure 13-4 -Refer to Figure 13-4. 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 potential real GDP is $7,000 billion, what must happen to planned investment for the economy to reach its potential real GDP? A) I<sub>P</sub> must be decreased by $1,000 billion B) I<sub>P</sub> must be increased by $1,000 billion C) I<sub>P</sub> must be decreased by $500 billion D) I<sub>P</sub> must be increased by $500 billion
-Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
IP = Planned Investment. Suppose AE = C + IP, and IP is autonomous. If potential real GDP is $7,000 billion, what must happen to planned investment for the economy to reach its potential real GDP?


A) IP must be decreased by $1,000 billion
B) IP must be increased by $1,000 billion
C) IP must be decreased by $500 billion
D) IP must be increased by $500 billion

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q23: The notion that a change in autonomous

Q27: Suppose that your annual income has averaged

Q36: The relationship between aggregate expenditures and real

Q41: Difficulty: Medium Figure 13-4 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5506/.jpg" alt="Difficulty:

Q49: Table 13-1<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5507/.jpg" alt="Table 13-1

Q49: Difficulty: Medium Figure 13-4 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5506/.jpg" alt="Difficulty:

Q127: Disposable personal income is<br>A) the income households

Q167: Personal saving is real GDP not spent

Q203: In the simple aggregate expenditure model where

Q209: Table 13-1<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5507/.jpg" alt="Table 13-1