Week 2 tasks Q ~ Search in Document Home Insert Design Layout References Mailings Review View Acrobat '+ Share ~ Times New R... * 11 A A Aa A AaBbCcDdE AaBbCcDdE AaBbCcDc AaBbCcDdEE Paste I U abe X2 X2 A . A . Normal No Spacing Heading 1 Heading 2 Styles Create and Share Request Pane Adobe PDF Signatures Real GDP 45 line 800 5700 I(AD) ITE = C + 1 6 600 Total Expenditures (billions of dollars) 8 898 200 100 0 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) Refer to Exhibit 10-5 above and answer all questions below: a) Choose a level of Real GDP that is not at equilibrium where AD = Real GDP $_ b) If autonomous consumption (Co) decreases, it follows that TE (or AD) will shift upward/downwardot be affected at all. c) If Real GDP stands at $600 billion, inventories will Fall/Rise/Remain Unchanged. d) If Real GDP is $600 billion, firms will most likely (chose either I, II, or III) I. Increase production to increase inventories to their optimum levels. II. Will neither increase nor decrease production since the economy is in equilibrium III. Will cut back production to reduce inventories to their optimum levels e) Suppose full employment level of Real GDP is at $600 bill and the economy is currently at $400 bill level of Real GDP. If the income multiplier is estimated to be 3.5, by how much should Autonomous Consumption (Co) change to push the level of Real GDP to change to reach the full employment level of Real GDP at the $600 bill? $Co = Page 2 of 2 220 words [ English (United States) + 116%