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Let Investment Be Given by I = 500 - 1,200R

Question 51

Multiple Choice

Let investment be given by I = 500 - 1,200R + 0.4Y, C = 200 + 0.75YD, the personal income tax rate equal 33 percent, and 0.8Y - 2,400 = M/P. If government spending equals 500 and the nominal money supply equals 100, which of the following represents the corresponding aggregate demand curve?


A) Y = 2,000 - 0.833M/P.
B) Y = 2,000 - 0.667M/P.
C) Y = 0.833M/P - 2,000.
D) Y = 0.833M/P + 2,000.
E) Y = 0.667M/P - 2,000.

Correct Answer:

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