Consider the Relationship Between the AE Curve and the AD

question 139

Multiple Choice

Consider the relationship between the AE curve and the AD curve.A fall in the amount of desired consumption,investment,government purchases,or net exports at any given level of national income

• A)shifts the AD curve to the left.
• B)shifts the AD curve to the right.
• C)causes a movement along the AD curve.
• D)causes a movement along the AE curve.
• E)causes a shift of the AE curve but no movement of the AD curve.

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Definitions:

Productive Economic Resource

Assets or inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.

Use Of Money

The various purposes for which money is used in an economy, including spending, saving, and investing.

Interest Rates

The percentage charged on borrowed money or paid on savings, essentially the cost of borrowing or the reward for saving.