Suppose GDP = $10,000, autonomous consumption is $600 and planned investment spending is $350, the marginal propensity to save is 0.75, and there is no Government and no foreign sector. What is the equation of the Planned Aggregate Expenditure (AE) function? AE=0.20Y + 300 AE=0.80Y + 500 AE=0.80Y + 900 AE=0.25Y + 950
Suppose GDP = $10,000, autonomous consumption is $600 and planned investment spending is $350, the marginal propensity to save is 0.75, and there is no Government and no foreign sector. What is the equation of the Planned Aggregate Expenditure (AE) function? AE=0.20Y + 300 AE=0.80Y + 500 AE=0.80Y + 900 AE=0.25Y + 950
Chapter23: The Aggregate Expenditure Model
Section: Chapter Questions
Problem 11P
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![Suppose GDP = $10,000, autonomous consumption is $600 and planned investment spending is $350, the marginal
propensity to save is 0.75, and there is no Government and no foreign sector. What is the equation of the Planned Aggregate
Expenditure (AE) function?
AE=0.20Y + 300
AE=0.80Y + 500
AE=0.80Y + 900
AE=0.25Y + 950](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad61fb23-6772-4c68-a944-71325d2213c5%2F991d6ff2-ee7d-41e1-9bed-cdc484cf1bf8%2Fua34the_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose GDP = $10,000, autonomous consumption is $600 and planned investment spending is $350, the marginal
propensity to save is 0.75, and there is no Government and no foreign sector. What is the equation of the Planned Aggregate
Expenditure (AE) function?
AE=0.20Y + 300
AE=0.80Y + 500
AE=0.80Y + 900
AE=0.25Y + 950
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