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ECO100Assign11 - James E Pesando Economics 100...

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James E. Pesando Economics 100 Assignment #11 Aggregate Demand and Aggregate Supply 1. When the price level is equal to 100, the following relationships hold: C = 15 + .8YD T = .25Y I = 20 G = 15 X = 30 M = 5 + .1Y All of these real expenditures are in billions of dollars. a) Draw the Aggregate Expenditure Schedule when the price level is equal to 100. Show that, at this price level, Aggregate Demand is equal to $150 billion. b) If the price level increases to 110, the following changes will occur to real autonomous expenditure: consumption will fall by 2 exports will fall by 2 imports will increase by 1 Draw the new Aggregate Expenditure Schedule. Show that, at this price level, Aggregate Demand is equal to $140 billion. c) If the price level decreases to 90, the following changes will occur to real autonomous expenditure: consumption will increase by 2 exports will increase by 2 imports will decrease by 1 Draw the new Aggregate Expenditure Schedule. Show that, at this price level, Aggregate Demand is equal to $160 billion.
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