Question 1
The aggregate consumption function is
C = 1,200 + 0.4
Yd. If income is $3,000 and net taxes are $400, consumption equals
◦ 1,760.
◦ 2,240.
◦ 2,560.
◦ 2,760.
Question 2
If output is greater than planned aggregate expenditure, there will be
◦ an unplanned increase in inventories.
◦ an unplanned decrease in inventories.
◦ no change in inventories.
◦ a planned increase in inventories.