Fill in the blanks with the number that corresponds to the correct word or phrase n the word bank: 1. smaller 2. autonomous expenditure 3. greater 4. Real GDP 5. Aggregate expenditure 6. Horizontal line 7. increasing 8. $400 9. decreasing 10. $4000 11. Autonomous consumption and 12. Consumption and investment induced consumption 13. Less than 14. crosses 15. Autonomous aggregate expenditure 16. Induced expenditure 17. $7000 Planned investment expenditures are they do not vary with real GDP while consumption spending is since it rises with real GDP. A curve showing induced aggregate expenditures has a slope than zero; while autonomous expenditure is represented by a on a graph. Given the following equation for a consumption function; C=$400 billion + 0.8 Y and the level of income is $ 5000, then autonomous consumption is billion and induced consumptions equals . Total consumption is the summation of . In a simple economy with no government and no international trade aggregate expenditure is the summation of . The slope of the aggregate expenditures curve, is given by the change in divided by the change in real GDP between any two points Equilibrium in the aggregate expenditure model occurs where aggregate expenditures in some period equal in that period. In gure 28.9 equilibrium is attained at a GDP of billion. The equilibrium solution occurs where the AE curve the 45-degree line. If rms were to produce a real GDP greater than $7,000 billion per year, aggregate expenditures would be real GDP, consumers and rms demand less than what was produced and rms respond by inventories. If firms were to produce a real GDP less than $7000 billion per year aggregate expenditures would be than GDP, consumers and rms would demand more than was produced; rms would respond by their inventories. If aggregate expenditures equal real GDP, then rms will leave their output unchanged; we have achieved equilibrium in the aggregate expenditures model. At equilibrium, there is no unplanned investment. Here, that occurs at a real GDP of $7,000 billion. The size of the multiplier depends on the slope of the curve the steeper the curve the the multiplier and the atter the curve the the multiplier