1.


FIGURE 9-9 The aggregate expenditures domestic output approach to equilibrium GDP. The aggregate expenditures schedule, C1 Ig, is determined by adding the investment schedule Ig to the upsloping consumption schedule C. Since investment is assumed to be the same at each level of GDP, the vertical distances between C and C 1 Ig do not change. Equilibrium GDP is determined where the aggregate expenditures schedule intersects the 45 degree line, in this case at $470 billion.
R-1 9-9

In this figure, the slope of the aggregate expenditures schedule C + Ig:

A. increases as real GDP increases.
B. falls as real GDP increases.
C. is constant and equals the MPC.
D. is constant and equals the MPS.



2.


FIGURE 9-9 The aggregate expenditures domestic output approach to equilibrium GDP. The aggregate expenditures schedule, C1 Ig, is determined by adding the investment schedule Ig to the upsloping consumption schedule C. Since investment is assumed to be the same at each level of GDP, the vertical distances between C and C 1 Ig do not change. Equilibrium GDP is determined where the aggregate expenditures schedule intersects the 45 degree line, in this case at $470 billion.
R-1 9-9

At all points on the 45 degree line:

A. equilibrium GDP is possible.
B. aggregate expenditures exceed real GDP.
C. consumption exceeds investment.
D. aggregate expenditures are less than real GDP.



3.


FIGURE 9-9 The aggregate expenditures domestic output approach to equilibrium GDP. The aggregate expenditures schedule, C1 Ig, is determined by adding the investment schedule Ig to the upsloping consumption schedule C. Since investment is assumed to be the same at each level of GDP, the vertical distances between C and C 1 Ig do not change. Equilibrium GDP is determined where the aggregate expenditures schedule intersects the 45 degree line, in this case at $470 billion.
R-1 9-9

The $490 billion level of real GDP is not at equilibrium because:

A. investment exceeds consumption.
B. consumption exceeds investment.
C. planned C 1 Ig exceeds real GDP.
D. planned C 1 Ig is less than real GDP.



4.


FIGURE 9-9 The aggregate expenditures domestic output approach to equilibrium GDP. The aggregate expenditures schedule, C1 Ig, is determined by adding the investment schedule Ig to the upsloping consumption schedule C. Since investment is assumed to be the same at each level of GDP, the vertical distances between C and C 1 Ig do not change. Equilibrium GDP is determined where the aggregate expenditures schedule intersects the 45 degree line, in this case at $470 billion.
R-1 9-9

The $430 billion level of real GDP is not at equilibrium because:

A. investment exceeds consumption.
B. consumption exceeds investment.
C. planned C 1 Ig exceeds real GDP.
D. planned C 1 Ig is less than real GDP.




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