Which One of the Following Statements Is the MOST Accurate

question 22

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) A rise in domestic real income raises aggregate demand for home output.
• B) A rise in domestic real income decreases aggregate demand for home output because of the increase demand for import.
• C) A rise in domestic real income keeps aggregate demand for home output at the same level.
• D) It is difficult to tell whether a rise in domestic real income affects positively or negatively aggregate demand for home output.
• E) A rise in domestic real income decreases aggregate demand for home output because the CA is raised.

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Definitions:

Slope

Measures the steepness, incline, or grade of a straight line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Indifference Curves

A graph showing different bundles of goods between which a consumer is indifferent, depicting preferences and trade-offs.

Right Angles

An angle of 90 degrees, commonly found in various geometric figures.

Indifference Curve

A graph showing different combinations of goods among which a consumer is indifferent.