Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption C and investment I, ie. Y = C+ I • Assume that I is unaffected by GDP • Assume the consumption function is C = co + cY • In any equilibrium aggregate demand, AD must be equal to Y, GDP. Given this model, which of the following statements is correct? Select one or more: O a. The aggregate demand equation is given by AD = co + cY + 1 O b. c, is equal to autonomous consumption O .ifc; is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that must intersect the 45 degree line at some point. O d. In a demand-driven economy the AD curve is a vertical line O e. In a demand-driven economy demand is equal to supply in equilibrium O f. In a supply-driven economy demand is equal to supply in equilibrium O g. In a demand-driven economy, supply creates its own demand O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = (Co + D/(1-c, )

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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• Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption C
and investment I, i.e. Y = C+ I
Assume that I is unaffected by GDP
• Assume the consumption function is C= co + cY
• In any equilibrium aggregate demand, AD must be equal to Y, GDP.
Given this model, which of the following statements is correct?
Select one or more:
O a. The aggregate demand equation is given by AD = co + CY + |
O b. c, is equal to autonomous consumption
O c. if c is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that must
intersect the 45 degree line at some point.
d. In a demand-driven economy the AD curve is a vertical line
O e. In a demand-driven economy demand is equal to supply in equilibrium
O f. In a supply-driven economy demand is equal to supply in equilibrium
g. In a demand-driven economy, supply creates its own demand
O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = (co +
D/(1-c1 )
Transcribed Image Text:• Assuming that there is no government spending or trade, an economy's GDP is the sum of domestic consumption C and investment I, i.e. Y = C+ I Assume that I is unaffected by GDP • Assume the consumption function is C= co + cY • In any equilibrium aggregate demand, AD must be equal to Y, GDP. Given this model, which of the following statements is correct? Select one or more: O a. The aggregate demand equation is given by AD = co + CY + | O b. c, is equal to autonomous consumption O c. if c is a number between 0 and 1, and I+co >0 then the aggregate demand equation is a straight line that must intersect the 45 degree line at some point. d. In a demand-driven economy the AD curve is a vertical line O e. In a demand-driven economy demand is equal to supply in equilibrium O f. In a supply-driven economy demand is equal to supply in equilibrium g. In a demand-driven economy, supply creates its own demand O h. If the economy above is a demand-driven economy, then the equilibrium solution for Y is given by Y = (co + D/(1-c1 )
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