The Figure Given Below Represents the Macroeconomic Equilibrium in the Aggregate

question 129

Multiple Choice

The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework.Assume that MPI is equal to zero. Figure 10.4 In the figure:
C: Consumption
I₁ and I₂: Investment
G: Government Spending
X: Exports
Refer to Figure 10.4.Starting at equilibrium level E₃ equilibrium level E₁ will be reached if aggregate expenditure:

• A)decreases by $200.
• B)increases by $200.
• C)decreases by $100.
• D)increases by $100.
• E)increases by $50.

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Definitions:

Sovereignty

Sovereignty is the supreme power or authority of a state to govern itself or another state, free from external control.

Constitutionally Divided

A term referring to the separation of powers among the different branches of government as defined by a constitution.

Implied

Something suggested or indicated, though not expressly stated.

Internal Revenue Service

The U.S. government agency responsible for the collection of taxes and enforcement of tax laws.