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Suppose That Last Year the Slope of the AE Curve

question 118

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Suppose that last year the slope of the AE curve was 0.67 and this year the slope of the AE curve changes to 0.8. Which of the following BEST describes what happens to the multiplier?


Definitions:

Good Or Service

Any tangible product (good) or intangible offering (service) that can be sold or provided in a market to satisfy the demand of a customer.

Marginal Revenue

The additional income received from selling one more unit of a product or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Output Level

The total quantity of goods and services produced in an economy over a specified period.

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