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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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