A $2,000 Decrease in Investment Will Shift the Aggregate Expenditures

question 84

Multiple Choice

A $2,000 decrease in investment will shift the aggregate expenditures curve down by:

• A) exactly $2,000 and will decrease the equilibrium level of real GDP by exactly $2,000.
• B) exactly $2,000 and will decrease the equilibrium level of real GDP by less than $2,000.
• C) exactly $2,000 and will decrease the equilibrium level of real GDP by more than $2,000.
• D) less than $2,000 and will decrease the equilibrium level of real GDP by less than $2,000.

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Definitions:

Business Entrepreneurs

Individuals who initiate, manage, and assume the risks of a business venture in pursuit of profit.

Planters

Large-scale farmers who owned significant amounts of land and typically utilized slave labor before the Civil War in the United States.

Public Schools

Educational institutions that are primarily funded and managed by local, state, or national governments, and free of charge for the children of a community.

Redeemers Power

Refers to the political power exerted by the Redeemers, a coalition of pro-business, white Democrats who sought to reclaim control from Republican reconstruction governments in the South after the Civil War.