In General, the Flatter the Aggregate Expenditure Curve, the

question 331

Multiple Choice

In general, the flatter the aggregate expenditure curve, the

• A) greater the value of autonomous expenditure.
• B) larger the marginal propensity to consume.
• C) larger the multiplier.
• D) smaller the multiplier.

Analyze the changes in GDP deflator to measure inflation.

Calculate National Income (NI) using different components of income.

Understand the concept of per capita GDP and its calculation.

Analyze the impact of real GDP changes on the economy.

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Definitions:

Excess Demand

A scenario in which the demand for a product or service surpasses the supply available at the existing price.

Surplus

An excess of production or supply over demand.

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, leading to downward pressure on the price.

Equilibrium Quantity

The amount of products or services that are both offered and sought after at the balance price, where the supply meets the demand exactly.