An Increase in the Aggregate Expenditures Schedule

question 80

Multiple Choice

An increase in the aggregate expenditures schedule

• A) increases aggregate demand by the amount of the increase in aggregate expenditures only.
• B) increases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier.
• C) decreases aggregate demand by the amount of the increase in aggregate expenditures.
• D) decreases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier.

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input, while holding other inputs constant.

Total Dollars

The aggregate or total amount of money without adjusting for factors such as inflation or purchasing power.

Optimal Factor Mix

The most efficient combination of resources and inputs a firm uses to produce goods or services at the lowest cost.

Resource Markets

Markets where productive inputs, such as labor, natural resources, and capital, are bought and sold.