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Sum of consumption expenditure

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Reference no: EM131372870

1. In a closed economy (no imports or exports), Aggregate Expenditure 'AE' is defined as the sum of Consumption Expenditure 'C', Investment

Expenditure 'I' and Government Expenditure 'G' or

AE = C + I + G

In equilibrium, Income 'Y' is equal to 'AE'.

If Y = $1265, C = $660, and I = $325, solve for G.

G = $_____________

2. An equation for Aggregate Expenditure is:

AE = $3600 - 0.8Y,

In equilibrium, Income 'Y' = Aggregate Expenditure 'AE'. Solve for Y.

Y = $_______________________

Reference no: EM131372870

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