An economy has a consumption function of C = 20 + 0.75(YD), taxes = 20, investment equal to 10, government expenditure equal to 15, exports equal to 15, and an import function of M = 0.2Y. There are no marginal taxes.
45) What is the equation for the aggregate expenditure curve for this economy?
A) AE = 60 + 0.55Y
B) AE = 55 + 0.45Y
C) AE = 45 + 0.55Y
D) AE = 25 + 0.75Y
E) AE = 55 + 0.45Y
46) What is equilibrium real GDP for this economy?
A) 100
B) 166.67
C) 180
D) 81.82
E) 144.44
47) What is the multiplier for a change in government spending for this economy?
A) 2.22
B) 1.82
C) 1.33
D) 4
E) 1