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AE Model: Graphing Macroeconomic Equilibrium
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AE Model: Graphing Macroeconomic Equilibrium
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16. Deriving the Aggregate Expenditures Model / AE Model: Graphing Macroeconomic Equilibrium / Problem 2
Problem 2
What is the effect on macroeconomic equilibrium if consumption decreases due to a rise in savings?
A
The aggregate expenditures line shifts downward, potentially decreasing GDP at equilibrium.
B
The slope of the aggregate expenditures line increases.
C
The aggregate expenditures line shifts upward, potentially increasing GDP at equilibrium.
D
The aggregate expenditures line remains unchanged.
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