The aggregate expenditures of the hypothetical country shown includes $2 billion in investment expenditures, $3 billion in government expenditures, and $1 billion in exports. At a real GDP of $18 billion, consumption expenditures less imports equal $12 billion and imports equal $2 billion. Use this information to graph the aggregate expenditures (AE) function. Assume autonomous consumption and autonomous imports are $0. Aggregate planned expenditures (in billions of $) 20 18 16 14 12 10 8 6 20 0 0 2 e 4 6 8 10 12 14 Real GDP (in billions of $) 45 degree line 16 AE 18 20

The aggregate expenditures of the hypothetical country shown includes $2 billion in investment expenditures, $3 billion in government expenditures, and $1 billion in exports. At a real GDP of $18 billion, consumption expenditures less imports equal $12 billion and imports equal $2 billion. Use this information to graph the aggregate expenditures (AE) function. Assume autonomous consumption and autonomous imports are $0. Aggregate planned expenditures (in billions of $) 20 18 16 14 12 10 8 6 20 0 0 2 e 4 6 8 10 12 14 Real GDP (in billions of $) 45 degree line 16 AE 18 20

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.8P

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