ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Spending
(billions of dollars)
800
45-degree line
AE
700
AE
600
00
400
300
200
100
100
200
300
400
500
600
700
Income or Real GDP
(billions of dollars)
800
3) In the above figure, the movement from AE1 to AE2 is caused by:
a. a $200 billion increase in investment expenditure.
b. a $100 billion increase in taxes.
c. a $100 billion increase in government purchases.
d. a $300 billion increase in real GDP.
e. a $100 billion increase in income.
4) Based on the information presented in the above figure, if investment
expenditure declines by $50 billion, then real income will
a. increase by $150 billion.
b. increase by $125 billion.
c. decrease by $125 billion.
d. decrease by $150 billion.
e. decrease by $50 billion.
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Transcribed Image Text:Spending (billions of dollars) 800 45-degree line AE 700 AE 600 00 400 300 200 100 100 200 300 400 500 600 700 Income or Real GDP (billions of dollars) 800 3) In the above figure, the movement from AE1 to AE2 is caused by: a. a $200 billion increase in investment expenditure. b. a $100 billion increase in taxes. c. a $100 billion increase in government purchases. d. a $300 billion increase in real GDP. e. a $100 billion increase in income. 4) Based on the information presented in the above figure, if investment expenditure declines by $50 billion, then real income will a. increase by $150 billion. b. increase by $125 billion. c. decrease by $125 billion. d. decrease by $150 billion. e. decrease by $50 billion.
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