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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**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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