In an economy in which government expenditure is $200 billion, exports are $70 billion imports are 15 percent of real GDP, autonomous consumption is $250 billion, investment is $350 billion, and marginal propensity to consume is 0.85
a) Draw the aggregate expenditure (AE) curve and indicate the equilibrium value.
b) What are the slope and the vertical axis intercept of the AE curve
c) What is the multiplier
d) If the investment rises to $450 billion, what will be the new equilibrium real GDP?
e) What is the impact on balance of trade in (d)