Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $200 billion and when it is $400 billion: Disposable Income $200 billion $400 billion Consumption $300 billion $400 billion Investment $100 billion $100 billion Government Purchases $175 billion $175 billion Net Exports $200 billion $180 billion Aggregate Expenditure $775 billion $855 billion On the following graph, use the blue curve to plot government purchases as a function of disposable income:
Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $200 billion and when it is $400 billion: Disposable Income $200 billion $400 billion Consumption $300 billion $400 billion Investment $100 billion $100 billion Government Purchases $175 billion $175 billion Net Exports $200 billion $180 billion Aggregate Expenditure $775 billion $855 billion On the following graph, use the blue curve to plot government purchases as a function of disposable income:
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 1.1P
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Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $200 billion and when it is $400 billion:
|
Disposable Income
|
|
---|---|---|
$200 billion
|
$400 billion
|
|
Consumption | $300 billion | $400 billion |
Investment | $100 billion | $100 billion |
Government Purchases | $175 billion | $175 billion |
Net Exports | $200 billion | $180 billion |
Aggregate Expenditure | $775 billion | $855 billion |
On the following graph, use the blue curve to plot government purchases as a function of disposable income:
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