Consider a Simple Aggregate Expenditure Model Where All Components of Aggregate

question 50

Multiple Choice

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. Which of the following events causes the aggregate expenditures curve to shift downwards?

• A) Firms become optimistic about future profits and increase investment spending.
• B) The government reduces property tax rates.
• C) The government cuts spending on education.
• D) Households save a greater portion of any change in disposable income.

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