Use the Following to Answer Questions

question 190

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures Curve
Figure 13-6
-(Exhibit: Aggregate Expenditures Curve) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. Suppose government purchases rise by $100. As a result,

• A) the aggregate expenditures curve shifts upward by $100.
• B) there is a movement along the aggregate expenditures curve from $1,600 to $1,700.
• C) the aggregate expenditures curve shifts upward by $100 * the multiplier.
• D) there is a movement along the aggregate expenditures curve from $1,600 to an amount equal to [$1,600 + ($100 * the multiplier)].

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Definitions:

Adapt

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