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Consider a small economy with autonomous consumption of $500 billion, an MPC of 0.6, planned investment of $100 billion, government spending of $75 billion, and

Consider a small economy with autonomous consumption of $500 billion, an MPC of 0.6, planned investment of $100 billion, government spending of $75 billion, and net exports of -$20 billion. There are no taxes. Real GDP (Y) is equal to $1,000 billion. What is aggregate expenditure?

a.

$1,295 billion

b.

$1,000 billion

c.

$1,100 billion

d.

$1,255 billion

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