Look at Figure 2. Assume this aggregate demand diagram represents an economy with government, where: a3 exogenous consumption b = the marginal propensity to consume t = the tax rate %3D | = investment %3D G = government spending Y = income Figure 2 Aggregate AD, demand AD 45° Income What is the equation for the aggregate demand schedule AD6? Select one: O ADO = b+ a(1 - t)G +1+ Y O ADO = a+ b(1- 1)Y +1+ G O ADo = a+ b(1 – t) I + Y+ G O ADO = b+ a(1 – t)Y + I + G Next page > ( Previous page

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Look at Figure 2. Assume this aggregate demand diagram represents an economy with government,
where:
a = exogenous consumption
b = the marginal propensity to consume
t = the tax rate
|= investment
G = government spending
Y = income
Figure 2
Aggregate
demand
AD,
AD.
45°
Income
What is the equation for the aggregate demand schedule ADo?
Select one:
O ADO = b+ a(1 - t)G +1+ Y
O ADO = a + b(1 – 1)Y + 1+ G
O ADO = a + b(1 - t) I+ Y+ G
O ADO = b+ a(1 – 1)Y + /+ G
Next page >
( Previous page
PHILIPS
Transcribed Image Text:Look at Figure 2. Assume this aggregate demand diagram represents an economy with government, where: a = exogenous consumption b = the marginal propensity to consume t = the tax rate |= investment G = government spending Y = income Figure 2 Aggregate demand AD, AD. 45° Income What is the equation for the aggregate demand schedule ADo? Select one: O ADO = b+ a(1 - t)G +1+ Y O ADO = a + b(1 – 1)Y + 1+ G O ADO = a + b(1 - t) I+ Y+ G O ADO = b+ a(1 – 1)Y + /+ G Next page > ( Previous page PHILIPS
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