A $500 Increase in Investment Will Shift the Aggregate Expenditures

question 45

Multiple Choice

A $500 increase in investment will shift the aggregate expenditures curve up by:

• A)exactly $500 and will increase the equilibrium level of real GDP by exactly $500.
• B)exactly $500 and will increase the equilibrium level of real GDP by less than $500.
• C)exactly $500 and will increase the equilibrium level of real GDP by more than $500.
• D)more than $500 and will increase the equilibrium level of real GDP by more than $500.
• E)less than $500 and will increase the equilibrium level of real GDP by less than $500.

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Definitions:

Binet

Alfred Binet, a French psychologist best known for developing the first intelligence test.

Thurstone

Refers to Louis Leon Thurstone, an influential American psychologist known for his contributions to psychometrics and the theory of intelligence.

Wechsler

Refers to David Wechsler, a psychologist who developed several widely used intelligence scales, including the Wechsler Adult Intelligence Scale (WAIS).

Spearman

was a British psychologist known for his work in statistics and intelligence, notably proposing the theory of general intelligence, or the "g factor."