Refer to the diagram to the right. If the U.S. economy is currently at point N, which of the following could cause it to move to point K? O A. Household wealth rises. OB. The firm's cash flow rises as profits rise. C. Households expect future income to decline. D. Government expenditures increase. Real Aggregate Expenditure, AE (trillions of $) 45° Real GDP, Y (trillions of $) Y = AE AE₂ Q Q AE1 5

Refer to the diagram to the right. If the U.S. economy is currently at point N, which of the following could cause it to move to point K? O A. Household wealth rises. OB. The firm's cash flow rises as profits rise. C. Households expect future income to decline. D. Government expenditures increase. Real Aggregate Expenditure, AE (trillions of $) 45° Real GDP, Y (trillions of $) Y = AE AE₂ Q Q AE1 5

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.8P

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Question

Refer to the diagram to the right. If the U.S. economy is
currently at point N, which of the following could cause it to
move to point K?
O A. Household wealth rises.
OB. The firm's cash flow rises as profits rise.
C. Households expect future income to decline.
D. Government expenditures increase.
Real Aggregate Expenditure, AE (trillions of $)
45°
Real GDP, Y (trillions of $)
Y = AE
AE₂
Q
Q
AE1
5

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