MacroEconomics Help !! http://imageshack.us/photo/my-images/838/nomic.png/ 1/ (F

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MacroEconomics Help !!

http://imageshack.us/photo/my-images/838/nomic.png/

1/ (Figure: Aggregate Expenditures and Real GDP) At a real GDP of $9,000 billion:
A) planned investment is less than investment.
B) planned investment equals investment.
C) planned investment is greater than investment.
D) there will be no unplanned investment.

2/ (Figure: Aggregate Expenditures and Real GDP) If the level of real GDP equals $9,000 billion, and if there are no changes in the consumption function or in planned investment, then we expect that, in the next period, real GDP will:
A) rise.
B) remain unchanged.
C) fall.
D) fall, but only if there is an offsetting change in autonomous consumption.

Explanation / Answer

1. The answer is A because the actual line of aggregate expenditures is less than the 45 degree line. 2. The answer is C because we are currently consuming too much as shown by weing past equilibrium. In the next period consumption will fall and the result will be a movement along the AE curve to equilibrium Hope this helps

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