Monetarists use the equation of exchange to predict the effects of changes in M on

Capacity utilization increases. What is the impact on aggregate expenditures and income?

A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.

If initial equilibrium real Gross Domestic Product (GDP) is $400 billion, MPC = 0.9, and autonomous investment increases $40 billion, equilibrium real Gross Domestic Product (GDP) will be

A) $440 billion. B) $360 billion. C) $600 billion. D) $800 billion.