FIGURE 21-3 -Refer to Figure 21-3. a Shift in the Aggregate Expenditure

question 85

Multiple Choice

FIGURE 21-3
-Refer to Figure 21-3. A shift in the aggregate expenditure function from AE0 to AE1 could be caused by

• A) a rise in the multiplier.
• B) a fall in the marginal propensity to consume.
• C) a rise in the marginal propensity to consume.
• D) an increase in desired investment expenditures.
• E) a decrease in desired investment expenditures.

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Definitions:

Budget Constraint

Describes the combinations of goods and services that a consumer can purchase given their income and the prices of these goods and services.

House Prices

The monetary value assigned to residential properties, influenced by factors like location, size, and market conditions.

Endowment

An investment fund established by a foundation that makes consistent withdrawals from invested capital, often used by universities, nonprofits, and churches.

World Market

An international marketplace where goods, services, currencies, and other commodities are exchanged across borders.