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

question 55

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) causes a movement up along a given aggregate expenditures curve and raises the equilibrium real GDP.
• B) shifts the aggregate expenditures curve upwards and raises the equilibrium real GDP.
• C) causes a movement down a given aggregate expenditures curve and lowers the equilibrium real GDP.
• D) shifts the aggregate expenditures curve downwards and lowers the equilibrium real GDP.

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Definitions:

Inference Forms

Inference forms refer to the logical structures that showcase how conclusions are derived from premises.

MP

Abbreviation for Modus Ponens, a form of argument where if 'P implies Q' and 'P' is asserted to be true, then 'Q' must be true.

Inference Forms

Patterns or structures of logical reasoning that derive conclusions from premises based on rules.

MP

An abbreviation for Modus Ponens, a form of argument in logic where if a conditional statement ("if P, then Q") is accepted, and the antecedent P holds, then the consequent Q logically must also hold.