Refer to the information provided in Figure 24.5 below to answer the question(s) that follow. Figure 24.5
-Refer to Figure 24.5. Which of the following equations best represents the aggregate expenditure function?

Question

Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.  Figure 24.5
-Refer to Figure 24.5. Which of the following equations best represents the aggregate expenditure function?

Quizplus · Accepted Answer

The aggregate expenditure function is typically represented as AE = C + I + G + NX, where C is consumption, I is investment, G is government spending, and NX is net exports. The equation AE = 400 + 0.75Y suggests a high marginal propensity to consume (MPC) of 0.75, which is a common value in economic models, making it a plausible representation of the aggregate expenditure function.

Refer to the Information Provided in Figure 24