Let AE = Aggregate Expenditures, C = Consumption, I_P =

question 75

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment,
G = Government Purchases.Consider a simple aggregate expenditures model, where
AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous.All other things unchanged, a decrease in the price level

• A)shifts the aggregate expenditures curve upwards and causes the aggregate demand curve to shift right.
• B)shifts the aggregate expenditures curve downwards and causes the aggregate demand curve to shift left.
• C)shifts the aggregate expenditures curve upwards and causes a movement up along a given aggregate demand curve.
• D)shifts the aggregate expenditures curve downwards and causes a movement down along a given aggregate demand curve.

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