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

question 191

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, 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.

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Definitions:

Kurt Lewin

A pioneering psychologist known for his contributions to social psychology, organizational development, and leadership theories.

Stagnation

A state of inactivity or lack of growth and development, often leading to decreased productivity and innovation.

Slowdown

A reduction in the speed or rate of activities, often referring to economic downturns or decreased productivity.

Enthusiasm

Intense and eager enjoyment, interest, or approval.