If autonomous expenditure increases with no change in the price level, what happens to the AE curve and the AD curve? Which curve shifts by an amount that is determined by the multiplier and why? The The because the curve shifts upward by an amount equal to the increase in autonomous expenditure. curve shifts nightward by an amount equal to the increase in autonomous expenditure times the multiplier at each price level. OA. AD, AE, AE curve plots aggregate planned expenditure OB. AD, AE, AE curve plots equilibrium expenditure O C. AE, AD, AD curve plots aggregate planned expenditure OD. AE, AD, AD curve plots equilibrium expenditure The graph shows the aggregate demand curve Investment increases by $0.5 trillion, and the multiplier is 4. Draw a new aggregate demand curve that shows the effect of the increase in investment Label it AD, Draw a point to indicate the quantity of real GDP demanded following the increase in investment when the price level is 115. Label it B Price level (GDP deflator, 2012-100) 165- Q a 145 125 115 105 85 14 AD 65 8 10 12 14 16 18 20 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.
If autonomous expenditure increases with no change in the price level, what happens to the AE curve and the AD curve? Which curve shifts by an amount that is determined by the multiplier and why? The The because the curve shifts upward by an amount equal to the increase in autonomous expenditure. curve shifts nightward by an amount equal to the increase in autonomous expenditure times the multiplier at each price level. OA. AD, AE, AE curve plots aggregate planned expenditure OB. AD, AE, AE curve plots equilibrium expenditure O C. AE, AD, AD curve plots aggregate planned expenditure OD. AE, AD, AD curve plots equilibrium expenditure The graph shows the aggregate demand curve Investment increases by $0.5 trillion, and the multiplier is 4. Draw a new aggregate demand curve that shows the effect of the increase in investment Label it AD, Draw a point to indicate the quantity of real GDP demanded following the increase in investment when the price level is 115. Label it B Price level (GDP deflator, 2012-100) 165- Q a 145 125 115 105 85 14 AD 65 8 10 12 14 16 18 20 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:If autonomous expenditure increases with no change in the price level, what happens to the AE curve and the
AD curve?
Which curve shifts by an amount that is determined by the multiplier and why?
The
The
because the
curve shifts upward by an amount equal to the increase in autonomous expenditure.
curve shifts nightward by an amount equal to the increase in autonomous expenditure times the multiplier
at each price level.
OA. AD, AE, AE curve plots aggregate planned expenditure
OB. AD, AE, AE curve plots equilibrium expenditure
O C. AE, AD, AD curve plots aggregate planned expenditure
OD. AE, AD, AD curve plots equilibrium expenditure
The graph shows the aggregate demand curve
Investment increases by $0.5 trillion, and the multiplier is 4.
Draw a new aggregate demand curve that shows the effect of the increase in investment Label it AD,
Draw a point to indicate the quantity of real GDP demanded following the increase in investment when the price level is
115. Label it B
Price level (GDP deflator, 2012-100)
165-
Q
a
145
125
115
105
85
14
AD
65
8
10
12
14
16
18
20
Real GDP (trillions of 2012 dollars)
>>> Draw only the objects specified in the question.
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