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The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

Question 91

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 equilibrium national income in this economy? A) $187.50 B) $294 C) $333.34 D) $625 E) $1666.67 FIGURE 22-2
-Refer to Figure 22-2.What is the equilibrium national income in this economy?


A) $187.50
B) $294
C) $333.34
D) $625
E) $1666.67

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