Explore BrainMass
Share

aggregate expenditure line

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

An increase in the price level will
a. shift the aggregate expenditure function upward
b. shift the aggregate expenditure function downward
c. result in a movement upward along the aggregate expenditure function
d. result in a movement downward along the aggregate expenditure function
e. change the slope of the aggregate expenditure function

© BrainMass Inc. brainmass.com October 24, 2018, 7:09 pm ad1c9bdddf
https://brainmass.com/economics/macroeconomics/aggregate-expenditure-line-59071

Solution Summary

This posting inspects an increase in the price level.

$2.19
See Also This Related BrainMass Solution

Analysis of IS/LM curves

1 Carefully explain and show graphically how each of the following changes would effect the shape of the IS curve:
a) The MPC becomes bigger.
b) Investment becomes more sensitive to changes in the real interest rate.

2 In the State of the union address in January 2002, President Bush announced that he would ask Congress to approve substantial increases in defense spending to counter terrorism and significant reductions in taxes. Show:
a) The short-run effects of his policy on aggregate Expenditure curve and the equilibrium level of GDP.
b) What the effects would be on IS/LM curves.

View Full Posting Details