6 The graph below depicts the economy in equilibrium at AE1. Equilibrium Dynamics 2 points AE=Y 600 AE2 550 eBook 500 450 AE, References 400 350 Aggregate Expenditures (billions of dollars) 300 250 200 150 100 50 0 50 100 150 50n So 300 350 $50 300 550 600 Real GDP (billions of dollars) Instructions: Enter your answers as a whole number. a. What is the equilibrium level of output at AE1? $ billion The economy experiences an increase in investment of $150 billion, shifting aggregate expenditures to AE2-b. At initial equilibrium output level, the increase in investment will result in what amount of aggregate expenditures? $ billion c. The increase in aggregate expenditures will cause an increase in output (income). By how much will output increase due to the additional income generated from the increased investment? $ billion d. The increase in income will lead to an additional increase in expenditures. By how much will expenditures increase due to the increase in income previously calculated? $ hillion e. This process will continue until reaching the final equilibrium. What is the equilibrium output when aggregate expenditures are AE57? % billion Suppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Income and Consumption 2 Disposable Income Consumption polnts (dollars) (dollars) o eBook 58,000 47,500 Beferences Instructions: In parts a and , enter your answers as a whole number. In part b, round your answers to two decimal places. a. What is the equilibrium level of consumption? $ b. What is the MPC and MPS for this economy? MPC: MPS: c. What is the value of autonomous consumption for this economy? $