Suppose That the Slope of the AE Curve Is 0

question 337

Multiple Choice

Suppose that the slope of the AE curve is 0.75. Then a $100 increase in autonomous spending means equilibrium expenditure will

• A) decrease by $750.
• B) decrease by $400.
• C) increase by $750.
• D) increase by $400.

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Definitions:

Par Value

The nominal or face value of a bond, or stock, as stated by the issuing company.

Treasury Stock

Shares that were issued and subsequently reacquired by the company. They are held in the company’s treasury and can be reissued or retired.

Common Stock

Equity ownership in a corporation, representing a claim on its dividends and assets, typically granting voting rights.

Shares Outstanding

The total number of shares of a company that have been issued and are currently held by investors.