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The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

Question 36

Multiple Choice

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc) = 0.75
∙ net tax rate (t) = 0.20
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: ∙ marginal propensity to consume (mpc) = 0.75 ∙ net tax rate (t) = 0.20 ∙ no foreign trade ∙ fixed price level ∙ all expenditure and income figures are in billions of dollars. FIGURE 22-2 -Refer to Figure 22-2.What is the level of autonomous consumption? A) $0 B) $75 C) $100 D) $175 E) $250 FIGURE 22-2
-Refer to Figure 22-2.What is the level of autonomous consumption?


A) $0
B) $75
C) $100
D) $175
E) $250

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