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.

---

Definitions:

Permanent Legal Residents

Individuals who have been granted the right to live indefinitely within a country but are not citizens of that country.

Migration Costs

expenses incurred by individuals or families when moving from one location to another, which may include transportation, housing, and administrative costs.

Country of Origin

Refers to the country where a product was manufactured or where a service originated from.

High Wage Rates

Refers to employment compensation that is at the upper end of the pay scale within a specific industry or region.