The distinction between autonomous and induced expenditure is important for the determination of equilibrium real GDP. Assume that the marginal propensity to consume is 0.6, the marginal propensity to import is 0.2 and autonomous aggregate expenditure is 60. Please make sure your final answer(s) are accurate to the nearest whole number.

Question 4 [6 points] The distinction between autonomous and induced expenditure is important for the determination of equilibrium real GDP. Assume that the marginal propensity to consume is 0.6, the marginal propensity to import is 0.2 and autonomous aggregate expenditure is 60. Please make sure your nal answer(s) are accurate to the nearest whole number. a) What is the equation for the aggregate expenditure function under these assumptions? b) Draw the aggregate expenditure function in the income-expenditure 45 line graph. v Aggregate expenditure ID 0 Aggregate Expenditure (AE) S o 30 60 90 120 150 180 210 2 Real GDP and Income (Y) c) What is the equilibrium level of real GDP? Equilibrium GDP =