Hi, could you please help me solve questions d, e, and f? Thank you! Question 2Refer to the information provided in Figure 23.9 below to answer the question(s) that follow.Aggregate expenditures($ millions)225200175150AE45°300100 200Aggregate output ($ millions)Figure 23.9a) Refer to Figure 23.9. Write the equation for the aggregate expenditure function (AE). Showyour work.b) Refer to Figure 23.9. What is the equilibrium level of output in this economy? State theequilibrium condition used to determine this.c) Explain the forces that maintain/drive the economy to this equilibrium by considering whatwill happen at the following two levels of output, $300 million and $100 million. You will needto discuss changes in investment through unplanned inventories and the response of output.d) Refer to Figure 23.9. How will equilibrium aggregate expenditure and equilibrium aggregateoutput change as a result of a decrease in investment by $20 million?e) The interest rate is an exogenous factor that effects the level of investment in an economy. Ifthe interest rate decreased, explain what would happen to planned investment. How would youchange the AE line drawn in 23.9 to reflect this change? What would happen to equilibriumoutput?f) Explain what Keynes meant by the phrase "animal spirits." Would animal spirits changethe location of AE and equilibrium output in the graph above? If so, be specific in yourexplanation of how each would change

Investment affects the aggregate demand in the economy. The rise in the investment causes rise in…

Question 2 Refer to the information provided in Figure 23.9 below to answer the question(s) that follow. Aggregate expenditures ($ millions) 225 200 175 150 45⁰ AE 100 200 300 Aggregate output ($ millions) Figure 23.9 a) Refer to Figure 23.9. Write the equation for the aggregate expenditure function (AE). Show your work

Question 2 Refer to the information provided in Figure 23.9 below to answer the question(s) that follow. Aggregate expenditures ($ millions) 225 200 175 150 45⁰ AE 100 200 300 Aggregate output ($ millions) Figure 23.9 a) Refer to Figure 23.9. Write the equation for the aggregate expenditure function (AE). Show your work

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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