3. (Table: Aggregate Spending) Use Table: Aggregate Spending. Suppose the economy hasno government spending and no foreign trade. With no taxes or transfers, real GDPequals disposable income (YD).Table: Aggregate SpendingReal GDPYDIPlanned$0$01006005005005006001,0001,0009006001,5001,5001,3006002,0002,0001,7006002,5002,5002,1006003,0003,0002,5006003,5003,5002,9006004,0004,0003,300600с.If real GDP is $2,500, what kind of adjustment would you expect firms to make in thefuture?

The economy will be at equilibrium where Income = AE Where AE = Consumption + Investment At 3500…

Answered: E. If real GDP is $2,500, what kind of…

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E. If real GDP is $2,500, what kind of adjustment would you expect firms to make in the future?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

3. (Table: Aggregate Spending) Use Table: Aggregate Spending. Suppose the economy has
no government spending and no foreign trade. With no taxes or transfers, real GDP
equals disposable income (YD).
Table: Aggregate Spending
Real GDP
YD
IPlanned
$0
$0
100
600
500
500
500
600
1,000
1,000
900
600
1,500
1,500
1,300
600
2,000
2,000
1,700
600
2,500
2,500
2,100
600
3,000
3,000
2,500
600
3,500
3,500
2,900
600
4,000
4,000
3,300
600
с.
If real GDP is $2,500, what kind of adjustment would you expect firms to make in the
future?

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