Assuming MPC = 0.5, a $2,000 decrease in intended investment will shift the aggregate expenditure curve down by
a. $2,000 and will decrease the equilibrium level of national income by $2,000
b. $2,000 and will decrease the equilibrium level of national income by less than $2,000
c. $2,000 and will decrease the equilibrium level of national income by more than $2,000
d. more than $2,000 and will decrease the equilibrium level of national income by more than $2,000
e. less than $2,000 and will decrease the equilibrium level of national income by less than $2,000
C
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The figure above shows how the sales of the video game "Tomb Raider—Lara Retires" change when the advertising spent on the game changes
Is the relationship between advertising and the number of games sold positive, negative, or neither? Explain your answer.
Which of the following is not a component of the aggregate expenditures of a country?
a. Investment b. Government spending c. Net exports d. Consumption e. Transfer payments