The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework.Assume that MPI is equal to zero. Figure 10.4
In the figure:
C: Consumption
I1 and I2: Investment
G: Government Spending
X: Exports
Refer to Figure 10.4.If autonomous government expenditures increase by $250 billion, equilibrium real GDP will:
A) rise by $250 billion.
B) fall by 300 billion
C) rise by $500 billion.
D) rise by $75 billion.
E) rise by $100 billion.
Correct Answer:
Verified
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