The slope of the aggregate expenditures curve is given by
A) aggregate expenditures ÷ ∆real GDP where ∆= change in.
B) aggregate expenditures ÷ real GDP.
C) ∆aggregate expenditures ÷ real GDP.
D) ∆aggregate expenditures ÷ ∆real GDP.

Question

Quizplus · Accepted Answer

The slope of a curve is defined as the change in the vertical axis variable divided by the change in the horizontal axis variable. In the case of the aggregate expenditures curve, the vertical axis variable is aggregate expenditures and the horizontal axis variable is real GDP. Therefore, the slope of the aggregate expenditures curve is the change in aggregate expenditures divided by the change in real GDP, which is represented by the symbol ∆. This is the same as option D, which is ∆aggregate expenditures ÷ ∆real GDP.

The Slope of the Aggregate Expenditures Curve Is Given by