Multiple Choice
Let AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment,
G = Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + IP + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, a decrease in the price level
A) shifts the aggregate expenditures curve upwards.
B) shifts the aggregate expenditures curve downwards.
C) causes a movement up along a given aggregate expenditures curve.
D) causes a movement down along a given aggregate expenditures curve.
Correct Answer:
Verified
Correct Answer:
Verified
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