quiz 10 - Georgia State University Principles...

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Principles Macroeconomics, ECON 2105 Quiz # 10 Key Name : Five multiple choice questions, please circle the best answer. 1. The planned aggregate expenditure equation of an economy is given by PAE = 150 , 000 + 0 . 85 Y. If the value of current real output of this economy equals $1,012,000, the value of unplanned business inventory investment equals a. - $1000. $1,800 . c. - $2 , 200. d. $15 , 000. e. none of the above. Given Y = 1 , 012 , 000, AE = 150 , 000 and mpc=0.85, you need to find I u . Y = AE + I u mps 1 , 012 , 000 1 = 150 , 000 + I u 0 . 15 now cross-multiply 150 , 000 + I u = 0 . 15 × 1 , 012 , 000 = 151800 I u = 151800 - 150000 = $1 , 800 . 2. The planned aggregate expenditures equation of an economy is given by PAE = 1500 + mpc × Y, where mpc stands for the marginal propensity to consume and is missing . If the equilibrium income of this economy equals 10,000(= Y e ), the missing mpc value equals a. 0.4. b. 0.65.
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quiz 10 - Georgia State University Principles...

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