Suppose that for every $1 increase in autonomous investment, real GDP demanded rises by $5. Which of the following must be true?
a. The line of aggregate expenditure exactly matches the line of equilibrium.
b. Noninvestment expenditures increase with every increase in investment spending.
c. The point of equilibrium will decrease with every increase.
d. The slope of the aggregate expenditure curve is 5.
b. Noninvestment expenditures increase with every increase in investment spending.
You might also like to view...
An economic model is a
A) realistic version of an economic environment. B) fictional representation of an entire economy. C) detailed version of an economic issue. D) simplified representation of an economic environment.
Rent controls
A) create a deadweight loss. B) increase maintenance by landlords. C) benefit people who live in rent controlled apartments. D) Both answers A and C are correct. E) Both answers B and C are correct.