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

question 89

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment,
G = Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. In this model, the slope of the AE curve is the

• A) MPC and the multiplier is 1 ÷ (1 - MPC).
• B) MPC and the multiplier is 1 ÷ MPC.
• C) multiplier and the multiplier is 1 ÷ MPS.
• D) MPC and the multiplier is ∆AE ÷ ∆Y where Y = real GDP.

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Definitions:

Positive Benefits

Advantageous or favorable outcomes that arise from a particular action or set of conditions, contributing to well-being or success.

Attitude Toward Time

An individual or cultural perception of time, emphasizing its value and importance, which impacts behavior and prioritization.

Cultural Difference

Variations in beliefs, behaviors, practices, and values among people from different societies or backgrounds.

Functional Conflict

Results in positive benefits to the group.