How Would an Economist Use an Aggregate Expenditure Line to Trace

question 76

Multiple Choice

How would an economist use an aggregate expenditure line to trace out a single aggregate demand curve?  

• A) by letting changes in autonomous spending shift the aggregate expenditure line 
• B) by letting changes in the price level shift the aggregate expenditure line 
• C) by letting changes in the level of income shift the aggregate expenditure line 
• D) by letting changes in real GDP shift the aggregate expenditure line

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Definitions:

Instinct Theory

A theory proposing that certain behaviors are innate and due to evolutionary programming.

Behavior

The behavior or responses of a person or system when influenced by external or internal factors.

Incentive

A factor, often a reward or a form of motivation, that induces or influences a person to act or perform in a certain way.

Social Disapproval

Negative judgments or reactions from others in response to an individual's actions, beliefs, or characteristics, often leading to feelings of shame or embarrassment.