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The Figure Shows Planned Aggregate Expenditure and Output for an Economy

Question 102

Multiple Choice

The figure shows planned aggregate expenditure and output for an economy. The figure shows planned aggregate expenditure and output for an economy. Suppose that the economy starts at PAE<sub>2</sub>. Which change would cause a move from PAE<sub>2</sub> to PAE<sub>1</sub>? A) The wealth level increases. B) Interest rates increase. C) Taxes decrease. D) Domestic income decreases. Suppose that the economy starts at PAE2. Which change would cause a move from PAE2 to PAE1?


A) The wealth level increases.
B) Interest rates increase.
C) Taxes decrease.
D) Domestic income decreases.

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