Aggregate expendiftures ($ millions) 3) AE AE AE 1,000 600 270 45° A 1,000 1,500 Aggregate output ($ millions) a) Referring to Figure above, write the equation for aggregate expenditure AE1 by explaining how to find the intercept and slope. b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A & B? Show your work. c) Assuming the economy's aggregate expenditure line is AE1, calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work. d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work.
Aggregate expendiftures ($ millions) 3) AE AE AE 1,000 600 270 45° A 1,000 1,500 Aggregate output ($ millions) a) Referring to Figure above, write the equation for aggregate expenditure AE1 by explaining how to find the intercept and slope. b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A & B? Show your work. c) Assuming the economy's aggregate expenditure line is AE1, calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work. d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how much increase would be in aggregate equilibrium output if there is a $10 million increase in planned investment. Show your work.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Aggregate expendfitures
($ millions)
3)
AE.
AE,
1,000
AE
600
270
45°
A 1,000 1,500
Aggregate output ($ millions)
a) Referring to Figure above, write the equation for aggregate expenditure. AEį by
explaining how to find the intercept and slope.
b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A& B?
Show your work.
c) Assuming the economy's aggregate expenditure line is AE1, calculate how much
increase would be in aggregate equilibrium output if there is a $10 million
increase in planned investment. Show your work.
d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how
much increase would be in aggregate equilibrium output if there is a $10 million
increase in planned investment Show your work.
+ 709](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdf715320-31b3-4813-9a7f-047469628c07%2F26a1f126-e1c6-4d43-adee-95f4b14475e4%2F31nix2b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Aggregate expendfitures
($ millions)
3)
AE.
AE,
1,000
AE
600
270
45°
A 1,000 1,500
Aggregate output ($ millions)
a) Referring to Figure above, write the equation for aggregate expenditure. AEį by
explaining how to find the intercept and slope.
b) Suppose AE], AE2 and AE3 are parallel. Calculate the value of Point A& B?
Show your work.
c) Assuming the economy's aggregate expenditure line is AE1, calculate how much
increase would be in aggregate equilibrium output if there is a $10 million
increase in planned investment. Show your work.
d) Now suppose the economy's aggregate expenditure line is AE2. Calculate how
much increase would be in aggregate equilibrium output if there is a $10 million
increase in planned investment Show your work.
+ 709
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