The above figure shows the demand and cost curves for a firm in monopolistic competition. The firm earns total revenue of

An increase in government purchases, an increase in the interest rate, and an increase in consumption all shift the aggregate expenditure line upward

a. True b. False

When policy makers choose between tax policy and spending policy to affect the level of aggregate demand, they tend to choose on the basis of

a. how large a public sector they want. b. how much they want to change aggregate demand. c. how much they want to change aggregate supply. d. which has the larger multiplier.