**Transcription for Educational Website**### Graph Explanation#### Graph 1:- **Title:** Graph depicting the relationship between Expenditure and Income.- **Axes:** - X-axis represents Income (Q), ranging from 0 to 120. - Y-axis represents Expenditure, also ranging from 0 to 120.- **Lines:** - **Line Q:** Represents a 45-degree line where expenditure equals income. - **Line AE1:** Lower line indicating a particular aggregate expenditure. - **Line AE2:** Upper line indicating a higher aggregate expenditure than AE1, parallel to AE1.#### Multiple Choice Question 6:06. What is the value of the "simple income multiplier" for autonomous spending?- (a) zero- (b) 3/2- (c) 5/2- (d) 1/2- (e) 2#### Graph 2:- **Similar setup as Graph 1** with Lines Q, AE1, and AE2 exhibiting similar relationships between expenditure and income.#### Multiple Choice Question 7:07. The shift from AE1 to AE2 will cause equilibrium income to change to:- (a) 50- (b) 90- (c) 20- (d) 60- (e) 75These graphs are useful for understanding concepts such as income multipliers and shifts in aggregate expenditure, important in macroeconomic theories.

Aggregate expenditure is the sum of consumption, investment, government spending and net export. The…

expenditures, income 120 110 100 90 80 70 60 50 40- 30 20 10 0 (b) 3/2 O (c) 5/2 O (d) 1/2 (e) 2 06. What is the value of the "simple income multiplier" for autonomous spending? O(a) zero Q AE2 AE1 0 10 20 30 40 50 60 70 80 90 100 110 120 income: Q

expenditures, income 120 110 100 90 80 70 60 50 40- 30 20 10 0 (b) 3/2 O (c) 5/2 O (d) 1/2 (e) 2 06. What is the value of the "simple income multiplier" for autonomous spending? O(a) zero Q AE2 AE1 0 10 20 30 40 50 60 70 80 90 100 110 120 income: Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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**Transcription for Educational Website**

### Graph Explanation

#### Graph 1:
- **Title:** Graph depicting the relationship between Expenditure and Income.
- **Axes:**
- X-axis represents Income (Q), ranging from 0 to 120.
- Y-axis represents Expenditure, also ranging from 0 to 120.
- **Lines:**
- **Line Q:** Represents a 45-degree line where expenditure equals income.
- **Line AE1:** Lower line indicating a particular aggregate expenditure.
- **Line AE2:** Upper line indicating a higher aggregate expenditure than AE1, parallel to AE1.

#### Multiple Choice Question 6:
06. What is the value of the "simple income multiplier" for autonomous spending?
- (a) zero
- (b) 3/2
- (c) 5/2
- (d) 1/2
- (e) 2

#### Graph 2:
- **Similar setup as Graph 1** with Lines Q, AE1, and AE2 exhibiting similar relationships between expenditure and income.

#### Multiple Choice Question 7:
07. The shift from AE1 to AE2 will cause equilibrium income to change to:
- (a) 50
- (b) 90
- (c) 20
- (d) 60
- (e) 75

These graphs are useful for understanding concepts such as income multipliers and shifts in aggregate expenditure, important in macroeconomic theories.

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