Question

1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases taxes by S50 billion, equilibrium aggregate output to s billion. A) increases; 2,000 B) decreases; 1,550 C) decreases; 1,450 D) decreases; 1,400 3) Refer to Figure 24.5. If the economy is in equilibrium and the government increases spending by $100 billion and increases taxes by $100 billion, equilibrium aggregate output A) does not change. B) increases by $100 billion. C) increases by less than $100 billion. D) increases by more than $100 billion. 4) Refer to Figure 24.5. [400 +0.75Y] best represents the A) tax multiplier. B) aggregate expenditure function. C) saving function. D) government spending multiplier. _billion, unplanned inventories equal $200 billion. 5) Refer to Figure 24.5. At aggregate output of $_ A) 2,400 B) 3,000 C) 3,200 D) 3,600

provide an explanation with a steps of the answer for each question please

Answer 1

0 МРО- MP-a - 120 1 200 to or 000 mm multiple = 1 4 A COP=41-200) = -800 3 - -0.5 Tor=0 o taxm tax multiplier = -MPC MPC = p in tak by so billion, oupe deneases to $150 billi Neu output = 16oor150=1450 billion Aggregate output a by loo bellion bicos Balance Budget multiplai ai Mooto.r5 Y=AE ) Y-you-0.854 = 200 Inwecky - Y-AE 0.254 =600 (y=2400 Aus is A