Question

MC Qu. 83 Refer to the accompanying figure. Based... Refer to the accompanying figure. PAE8.000 0.75Y PAE = 5.000 +0.75Y PAE - 4.000 +0.75Y Planned Aggregate Expenditure, PAE 5.000 16.000 20.000 24.000 Output Y Based on the figure, the income-expenditure multiplier in the economy illustrated equals: O 0.75 4 O 4,000 1.000

Answer 1

- - C Kno nne al YU The slope of the planned expenditure is coefficient of y. So; selope = 0.75 The slope of planned expenditure is also known as marginal propensity to condome (mpc) so; MPLE 0.75 The expenditure mutiplier = 1 ampe moins 25 쁜 which implies that if expenditure changes by lunit the northet a changes by Yunita - This can be seen in the diagram also. when the intercept changes by 1000 output changes by 4000 units. utbut पळनेर