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

question 81

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. All other things unchanged, a decrease in the price level

• A) shifts the aggregate expenditures curve upwards and causes the aggregate demand curve to shift right.
• B) shifts the aggregate expenditures curve downwards and causes the aggregate demand curve to shift left.
• C) shifts the aggregate expenditures curve downwards and causes a movement up along a given aggregate demand curve.
• D) shifts the aggregate expenditures curve upwards and causes a movement down along a given aggregate demand curve.

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Definitions:

Fallacy

An error in reasoning or argumentation that leads to a conclusion being invalid or deceptive, often due to a flaw in the structure of the argument.

Equivocation

The misleading use of a term with more than one meaning or sense, causing a fallacy in argumentation due to ambiguous language.

Appeal to Ignorance

A logical fallacy in which it is claimed that a proposition is true because it has not yet been proven false, or vice versa.

Burden of Proof

The obligation to prove one's assertion or argument, typically resting on the party who makes a claim in a dispute.