Consider the Simplest Macro Model with a Constant Price Level

question 78

Multiple Choice

Consider the simplest macro model with a constant price level and demand-determined output.In such a model,an upward shift of the saving function causes equilibrium national income to

• A)fall because the AE function shifts downward simultaneously.
• B)rise because the AE function shifts upward simultaneously.
• C)remain constant but consist of more consumption and less investment.
• D)remain constant but consist of less consumption and more investment.
• E)remain constant because it does not affect desired aggregate expenditure.

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