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The Figure Shows Planned Aggregate Expenditure and Output for an Economy

Question 26

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>. What change would cause a move from PAE<sub>2</sub> to PAE<sub>1</sub>? A) Consumption increases. B) Investment increases. C) Exports increase. D) Government spending decreases. Suppose that the economy starts at PAE2. What change would cause a move from PAE2 to PAE1?


A) Consumption increases.
B) Investment increases.
C) Exports increase.
D) Government spending decreases.

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