The Slope of the Aggregate Expenditures Function (AE)is Flatter Than

question 24

Multiple Choice

The slope of the aggregate expenditures function (AE) is flatter than the C+I+G function because:

• A)the marginal propensity to consume is ususally less than 1.
• B)the marginal propensity to import is greater than 1.
• C)the slope of the net exports function is negative.
• D)investment(I)and government spending(G)are assumed to be autonomous.
• E)there is a leakage from the aggregate expenditures function in the form of savings.

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