The Figure Shows Planned Aggregate Expenditure and Output for an Economy

question 102

Multiple Choice

The figure shows planned aggregate expenditure and output for an economy. Suppose that the economy starts at PAE₂. Which change would cause a move from PAE₂ to PAE₁?

• A) The wealth level increases.
• B) Interest rates increase.
• C) Taxes decrease.
• D) Domestic income decreases.

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