If real GDP increases from $2,000 to $2,500 and aggregate expenditures increase from $1,900 to $2,200, the slope of the aggregate expenditures curve is
A) 0.6.
B) 0.7.
C) 0.8.
D) 0.9.

Question

Quizplus · Accepted Answer

The slope of the aggregate expenditures (AE) curve is given by the formula: ΔAE/ΔY, where ΔAE is the change in aggregate expenditures and ΔY is the change in real GDP. Using the given values, ΔAE = $300 and ΔY = $500. Therefore, slope of the AE curve = ΔAE/ΔY = $300/$500 = 0.6.

If Real GDP Increases from $2,000 to $2,500 and Aggregate