A Rise in Autonomous Planned Investment Spending Causes the Equilibrium

question 98

Multiple Choice

A rise in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________,everything else held constant.

• A)rise;LM;right
• B)rise;IS;right
• C)fall;IS;left
• D)fall;LM;left

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Definitions:

Economic Profits

The difference between a firm's total revenues and its total economic costs, where economic costs include both explicit and implicit costs.

Perfectly Competitive

In a perfectly competitive market, there are many buyers and sellers, the products are homogenous, and no single entity can influence the market price.

Demand Rises

Occurs when there is an increase in the quantity of a good or service that consumers are willing and able to purchase at a given price.

Economic Profit

The disparity measure in between overall returns and full expenses, including both exposed and indirect costs.