FIGURE 23-1 -Refer to Figure 23-1.Assume the Economy Is Initially in Equilibrium

question 136

Multiple Choice

FIGURE 23-1
-Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is .Now,suppose the AE curve shifts to and we move to a new equilibrium level of GDP at and point E on .A possible cause of this change in equilibrium is

• A)an increase in government purchases.
• B)an increase in the net tax rate.
• C)a decrease in desired investment.
• D)a decrease in desired net exports.
• E)an exogenous fall in the price level.

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