Consider a Simple Aggregate Expenditure Model Where All Components of Aggregate

question 30

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 upwards?

• A) Foreign economies go into a recession and buy less domestically produced goods.
• B) Households become more present oriented and decrease the autonomous component of saving.
• C) Firms expect future profits to fall and cut investments accordingly.
• D) The government cuts spending on healthcare.

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