The Aggregate Expenditure (AE)function Is an Upward-Sloping Curve That Describes

question 22

Multiple Choice

The aggregate expenditure (AE) function is an upward-sloping curve that describes

• A)the amount spent on an economy's output at each national income.
• B)what firms and households would like to spend at each level of national income.
• C)what an economy would like to spend,in the absence of income constraints,at each level of output.
• D)what is actually spent on an economy's output at each level of output.
• E)what is actually spent at each level of national income.

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Definitions:

Demand for Land

The demand for land refers to the desire, backed by purchasing power, for the use of land resources for residential, commercial, or agricultural purposes.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied changes infinitely with even the smallest change in price.

Perfectly Inelastic

A situation where the demand or supply for a good does not change in response to changes in price.

Single Tax

A system where only one type of tax is levied, often proposed for simplifying the tax system.