In Deriving the Aggregate Demand Curve from the Aggregate Expenditures

question 127

Multiple Choice

In deriving the aggregate demand curve from the aggregate expenditures model, we note that

• A) the real-balances effect is irrelevant to both models.
• B) a change in the price level will have no impact on the aggregate expenditures schedule.
• C) an increase (decrease) in the price level shifts the aggregate expenditures schedule upward (downward).
• D) an increase (decrease) in the price level shifts the aggregate expenditures schedule downward (upward).

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Definitions:

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