Difficulty: Medium Figure 13-4 -Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JI_P = Planned Investment. Suppose AE = C + I_P, and I_P 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_P must be decreased by $1,000 billion B) I_P must be increased by $1,000 billion C) I_P must be decreased by $500 billion D) I_P must be increased by $500 billion

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The Answer of Difficulty: Medium Figure 13-4 -Refer to Figure 13-4. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JI_P = Planned Investment. Suppose AE = C + I_P, and I_P 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_P must be decreased by $1,000 billion B) I_P must be increased by $1,000 billion C) I_P must be decreased by $500 billion D) I_P must be increased by $500 billion