In the Simple Aggregate Expenditure Model Where All Components of Aggregate

question 156

Multiple Choice

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, if the slope of the aggregate expenditures curve decreases, the multiplier

• A) increases.
• B) decreases.
• C) remains constant.
• D) is undefined.

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Definitions:

Panama Canal

A man-made 48-mile waterway in Panama that connects the Atlantic Ocean with the Pacific Ocean, greatly facilitating international maritime trade by providing a significantly shorter passage for ships than going around the southern tip of South America.

Moral Imperialism

The Wilsonian belief that U.S. foreign policy should be guided by morality and should teach other peoples about democracy. Wilson used this belief to both repudiate Dollar Diplomacy and justify frequent military interventions in Latin America.

American Values

Core principles and beliefs that are said to shape the American way of life, including freedom, democracy, and equality.

Dollar Diplomacy

A foreign policy strategy used by the United States in the early 20th century that aimed to use economic power and investment to influence and protect American interests abroad.