When real GDP is zero, investment is $2.0 trillion, government expenditure is $1.5 trillion, exports are $1.5 trillion, and consumption expenditure is zero. Aggregate expenditure (trillions of 2012 dollars) 7.0- Draw a line that shows autonomous expenditure. Label it A. 6.0- What is consumption expenditure minus imports, which varies with real GDP called? 5.0- O A. actual expenditure 4,0- OB. domestic expenditure OC. aggregate expenditure 3.0- O D. induced expenditure 2.0- 1.0- 0.0- 0.0 1.0 2.0 3.0 4.0 5.0 6.0 8.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.

3

GDP in an economy is $8,000 billion. Consumer expenditures are $4,800 billion, government purchases are $1,600 billion, and gross investment is $1,500 billion. Net exports must be $_____ billion. Your Answer: Answer 4

Classify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services: Item 1. Packing boxes bought by Amazon.com. Item 2. Starbuck's grande mocha frappuccino bought by a student. Item 3. A new limousine for the president. Item 4. New airplanes bought by United Airlines. Item 1 is and item 2 is O A. an intermediate good; a final good that is consumption expenditure B. a final good that is consumption expenditure; a final good that is consumption expenditure C. a final good that is consumption expenditure; a final good that is investment D. an intermediate good; a final good that is investment Item 3 is and item 4 is O A. an intermediate good; an intermediate good O B. a final good that is government expenditure; a final good that is investment O C. an intermediate good; a final good that is investment D. a final good that is government expenditure; an…