Figure 13-6
-Refer to Figure 13-6 $\times$ The Multiplier $\times$ The Multiplier)]

question 2

Multiple Choice

Figure 13-6
-Refer to Figure 13-6. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. Suppose government purchases rise by $100. As a result,

• A) the aggregate expenditures curve shifts upward by $100.
• B) there is a movement along the aggregate expenditures curve from $1,600 to $1,700.
• C) the aggregate expenditures curve shifts upward by $100 \(\times\) the multiplier.
• D) there is a movement along the aggregate expenditures curve from $1,600 to an amount equal to [$1,600 + ($100 \(\times\) the multiplier)].