Let AE = Aggregate Expenditures, C = Consumption, I_P =

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment,
G = Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. The MPC is 0.6. If investment expenditures rise by $100 billion, the equilibrium level of real GDP of rises by

A) $250 billion.
B) $300 billion.
C) $500 billion.
D) $1,500 billion.