Multiple Choice
In a certain economy, the components of planned spending are given by:
C = 500 + 0.8(Y - T ) - 300r
I ᴾ= 200 - 400r
G = 200
NX = 10
T = 150
Given the information about the economy above, what would be the impact on autonomous expenditures of a one-percentage-point increase in the real interest rate (r ) ?
A) Autonomous expenditures would increase by 35 units.
B) Autonomous expenditures would decrease by 700 units.
C) Autonomous expenditures would decrease by 35 units.
D) Autonomous expenditures would decrease by 7 units.
Correct Answer:

Verified
Correct Answer:
Verified
Q138: Federal Reserve actions that increase nominal interest
Q141: The money demand curve will shift to
Q142: A policy reaction function describes how the
Q143: Since the Fed faces uncertainty regarding effects
Q144: Higher nominal interest rates _ the amount
Q145: Because the Fed determines the money supply,
Q147: Based on the diagram, if potential output
Q148: In Macroland, currency held by the public
Q149: Which of the following would be expected
Q151: According to the Taylor rule, the Federal