W AE Activity.docx Download Share File Edit Format Tools Help List Paragr... Times New ... 12 BIU A.A. Aggregate Expenditure Activity: 1. What does it mean that Jessica's MPC = .8? 1 point 2. If I told you that when Matt's income increased from $4000 a month to $5000 his savings increased from $500 to $700. Now what is Matt's MPC and MPS? 1 point 550 525 AE1 500 AEo 475 Aggregate Expenditures 450 425 400 375W AE Activity.docx Download Share File Edit Format Tools Help List Paragr... Times New ... 12 BIU A. A. 550 525 AE1 500 AEo 475 Aggregate Expenditures 450 425 400 375 350 350 375 400 425 450 475 500 525 550 Real GDP (billions of dollars) 3. If you know that the vertical intercept of AE, is 362.5 and the vertical intercept of AE, is 387.5, Use the graph above to answer the following questions: 3 points a. If AE, is the AE function for that economy, and if the potential level of GDP is 500. is the economy suffering a recessionary or an inflationary gap?W AE Activity.docx Download Share File Edit Format Tools Help List Paragr... Times New ... 12 BIU A.A. b. What is the MPC, MPS, and the spending multiplier in that economy? c. Given your answer for a by how much do we need to change the AE to close the gap