The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.80
• net tax rate (t) = 0.15
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. FIGURE 22-3
Refer to Figure 22-3.Which of the following equations describes the aggregate expenditure function for this economy?

Question

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.80
• net tax rate (t) = 0.15
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars.

FIGURE 22-3
Refer to Figure 22-3.Which of the following equations describes the aggregate expenditure function for this economy?

Quizplus · Accepted Answer

The Answer of The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc)= 0.80 • net tax rate (t)= 0.15 • no foreign trade • fixed price level • all expenditure and income figures are in billions of dollars. FIGURE 22-3 Refer to Figure 22-3.Which of the following equations describes the aggregate expenditure function for this economy? A)AE = 1000 + (0.68)Y B)AE = 1000 + (0.80) C)AE = 1000 + (0.80)Y + 0.15 Y_D D)AE = 1975 + (0.68)Y E)AE = 1975 + (0.65)Y

The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical