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

question 62

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) shifts the aggregate expenditures curve upwards.
• B) shifts the aggregate expenditures curve downwards.
• C) causes a movement up along a given aggregate expenditures curve.
• D) causes a movement down along a given aggregate expenditures curve.

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Definitions:

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, often used in decision-making to determine if information should be considered.

Decisions

Choices made by individuals or organizations concerning options that affect processes, strategies, or outcomes.

Split-Off Point

That point in the manufacturing process where some or all of the joint products can be recognized as individual products.

Joint Products

Two or more products that are produced from a common input.