Figure 82 Alt Text for Figure 8

question 125

Multiple Choice

Figure 8.2 Alt text for Figure 8.2: In figure 8.2, a graph comparing real GDP and real aggregate expenditure.
Long description for Figure 8.2: Line AE1, begins a little less than half way along the x-axis and slopes up toward the end of the x-axis.Line AE2, begins at a point half way on the x-axis and slopes up to the top right corner.Line AE2 is to the left of AE1, and is on a similar path as the line AE1.Line Y = AE, originates at the vertex and slopes upward toward the top right corner.Line Y = AE meets line AE1 at point K, half way along both lines, and meets line AE2 at point N, plotted close to the right end of the line AE2.Point J is plotted a little less than half way along the line AE1, to the left of point K.Another point L is marked close to the right end of line AE1, to the right of point K.
-Refer to Figure 8.2.If the Canadian economy is currently at point N, which of the following could cause it to move to point K?

• A)Households expect future income to decline.
• B)Household wealth rises.
• C)The firm's cash flow rises as profits rise.
• D)Government expenditures increase.
• E)Canadians begin importing more goods.

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Definitions:

U.S.

A country consisting of 50 states, a federal district, and various territories, known formally as the United States of America.

People's Republic Of China

A country in East Asia, the world's most populous nation, governed by the Communist Party of China.

Marginal Product

The increase in output that results from employing an additional unit of a factor of production, ceteris paribus.

Labor

Human effort, both physical and mental, used in the production of goods and services, considered an essential factor of production.