Question: 9) The line AE = Y represents the equilibrium condition when aggregate expenditure equals real GDP. Hence, it is a 45-degree line. The line AE

9) The line AE = Y represents the equilibrium condition when aggregate expenditure equals real GDP. Hence, it is a 45-degree line. The line AE = C+I+G+NX represents the aggregate expenditure. What is the equilibrium real GDP when AE=C+I+G+NX? Note: This is an easy question. There is no trick here. However, please make sure you watch the lecture videos and truly understand the concept (the differences between these two lines, why AE=Y is an equilibrium condition, why AE=C looks like that, and why there is a parallel shift when AE=C+I, AE=C+I+G and AE=C+I+G+NX)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Hello I have an economics math based graphing question. Here is the question via image, and have provided the answer options for the blanks as well. I am also having trouble plotting the lines could...

Everything else constant, the international trade effect indicates that aggregate expenditures in the domestic economy fall when: A) domestic prices fall relative to foreign prices. B) domestic...

The following graph plots three planned expenditure lines for a hypothetical economy, each associated with a different price level. The line labeled PE120 corresponds to a price level of 120; the...

Part one. Explain. Everything else constant, the international trade effect indicates that aggregate expenditures in the domestic economy fall when: A) domestic prices fall relative to foreign...

Everything else constant, the international trade effect indicates that aggregate expenditures in the domestic economy fall when: A) domestic prices fall relative to foreign prices. B) domestic...

Hello I have an economics math graphing based question, I am trying to figure out where to plot the blue line (circle symbols) to plot this economy's initial aggregate expenditure line, (C + I)....

Use the information in the Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). Figure 1. Equilibrium in a Private Closed Economy 45 degree...

Question 1 (1 point) E-II The multiplier principle illustrates that 0 an increase in investment spending will be multiplied into a larger increase in GDP. 0 an increase in GDP will be multiplied into...

Need some help with the aggregate expenditures & drop-down selections, thanks! The following table shows consumption ((3), investment (I), government spending (G), and net exports {X M) in a...

The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the year ended December 31, 2007: Cash and cash equivalents, Jan. 1 $ 35,800 Cash and cash equivalents,...

An approximation for the potential energy of a KCl molecules U = A[(RJ/8r8 ) - l/r], where Ro = 2.67 X l0-l0 m and A = 2.31 X 10-28 J. m. Using this approximation: (a) Show that the radial component...

What is generally agreed to be the most realistic theory of organization?

You have your recreational "all age" track team performing "whistle" sprints where you blow a whistle and they're to sprint until you blow the whistle again. You've determined that 1 0 - second...

10. Choose someone you know and answer the following questions: a) Does this person have a low or high level of competence in a particular field? b) Do you have a low or high level of confidence in...

1. To gain insight into how a communication situation can be framed to maximize impact.

2. We can change the use and meaning of the concepts and thereby the meaning of the social reality to which they refer.