Consider the Following News Headline: "Canadians Develop a Greater Taste

question 126

Multiple Choice

Consider the following news headline: "Canadians develop a greater taste for foreign vacations." Assuming that aggregate output is demand-determined,what effect will this have,all other things equal,on the AE function and on equilibrium national income?

• A)The AE function will shift down parallel to itself,and equilibrium national income will fall.
• B)The AE function will rotate upward (become steeper),and equilibrium national income will rise.
• C)The AE function will rotate downward (become flatter),and national income will fall.
• D)The AE function will shift up parallel to itself,and equilibrium national income will rise.
• E)There will be no change in the AE function or in equilibrium national income.

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Definitions:

Hammer

A tool typically used to drive nails into, or pull them from, some other object, usually consisting of a handle and a heavy head used to deliver an impact.

Bones

The rigid organs that form part of the endoskeleton of vertebrates, providing support, protection, and aiding in movement by forming levers for muscles to act upon.

Cochlea

A spiral-shaped, fluid-filled inner ear structure that is responsible for converting sound waves into nerve impulses.

Sense of Smell

The ability to perceive odors through olfactory sensory neurons in the nose, which play a key role in human interactions and perceiving the environment.