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Question 41

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Use the information below to answer the following questions.
Fact 11.5.1
An economy has a consumption function of C = 10 + 0.8Y, investment equal to 6, government expenditure equal to 10, exports equal to 10, and an import function of M = 0.1Y.
-Refer to Fact 11.5.1.If autonomous consumption increases by 10, what is the new equation of the aggregate expenditure function for this economy?


A) AE = 36 + 0.7Y
B) AE = 46 + 0.7Y
C) AE = 46 + 0.9Y
D) AE = 26 + 0.7Y
E) AE = 46 + 0.8Y

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