Using Figure 2 Above, Suppose That the Economy Started at PAE2

question 72

Multiple Choice

Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:

• A) consumption increases.
• B) investment increases.
• C) export increase.
• D) government spending decreases.

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Definitions:

Expand

To increase in size, volume, quantity, or scope; in business, it often refers to growth strategies through opening new locations, markets, or product lines.

Constitutional

Relating to an established set of principles governing a state or other organization.

Salaries

refer to a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

Smoot-Hawley Tariff

A 1930 U.S. law that raised tariffs on thousands of imported goods, contributing to the Great Depression.