In Deriving the Aggregate Demand Curve from the Aggregate Expenditures

question 203

Multiple Choice

In deriving the aggregate demand curve from the aggregate expenditures model we note that:

• A)the wealth or real balances effect is irrelevant to both models.
• B)a change in the price level will have no impact on the aggregate expenditures schedule.
• C)an increase (decrease) in the price level shifts the aggregate expenditures schedule upward (downward).
• D)an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward).

---

Definitions:

Quarterly

Pertaining to a period of three months or occurring every three months.

Retires

Withdraws from active working life, often due to reaching a certain age or completing a specific length of service.

Perpetuity

A type of annuity that pays a fixed amount to an individual indefinitely.

Scholarship

Financial support awarded to a student, based on academic achievement or other criteria, to help pay for education expenses.