Let AE = Aggregate Expenditures, C = Consumption, I_P =

question 56

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, JG = Government Purchases. Consider a simple aggregate expenditures model, where
JAE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, an increase 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 a given aggregate expenditures curve.