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The Figure Shows Planned Aggregate Expenditure and Output for an Economy

question 25

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The figure shows planned aggregate expenditure and output for an economy. The figure shows planned aggregate expenditure and output for an economy.   Suppose that the economy starts at PAE<sub>2</sub>. Which change would cause a move from PAE<sub>2</sub> to PAE<sub>1</sub>? A)  The wealth level decreases. B)  Interest rates decrease. C)  The expected profitability of investments increase. D)  Domestic income decreases. Suppose that the economy starts at PAE2. Which change would cause a move from PAE2 to PAE1?


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