The Figure Given Below Shows the Aggregate Expenditures Function of an Economy.?Figure

question 14

Multiple Choice

The figure given below shows the aggregate expenditures function of an economy.?Figure 9.5

-Refer to figure 9.5. The slope of the aggregate expenditures function (AE) is flatter than the C+I+G function because:

• A) the marginal propensity to consume is ususally less than 1.
• B) the marginal propensity to import is greater than 1.
• C) the slope of the net exports function is negative.
• D) investment(
• I) and government spending(
• G) are assumed to be autonomous.
• E) there is a leakage from the aggregate expenditures function in the form of savings.

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