-Refer to the information above to answer this question.What is the equation for aggregate expenditures?
A)AE = 600.
B)AE = 2000.
C)AE = 600 + 0.6Y.
D)AE = 600 + 0.8Y.
E)AE = 600 - 0.8Y

Question

-Refer to the information above to answer this question.What is the equation for aggregate expenditures?
A)AE = 600. 
B)AE = 2000. 
C)AE = 600 + 0.6Y. 
D)AE = 600 + 0.8Y. 
E)AE = 600 - 0.8Y

Quizplus · Accepted Answer

The equation for aggregate expenditures typically includes autonomous spending (which does not depend on income) plus induced spending (which is a function of income). The correct option, C) AE = 600 + 0.6Y, represents a basic form of an aggregate expenditure model where 600 is the autonomous spending and 0.6Y represents the induced spending, which is dependent on the level of income (Y).

-Refer to the Information Above to Answer This Question