Multiple Choice
Figure 13-6 ![Figure 13-6 -Refer to Figure 13-6. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JI<sub>P</sub> = Planned Investment, G = Government Purchases. Further, I<sub>P</sub> and G are autonomous. Suppose government purchases rise by $100. As a result, A) the aggregate expenditures curve shifts upward by $100. B) there is a movement along the aggregate expenditures curve from $1,600 to $1,700. C) the aggregate expenditures curve shifts upward by $100 * the multiplier. D) there is a movement along the aggregate expenditures curve from $1,600 to an amount equal to [$1,600 + ($100 * the multiplier) ].](https://d2lvgg3v3hfg70.cloudfront.net/TB5507/11eab912_7efb_4ea1_99e6_47c0c3ee1f84_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00_TB5507_00.jpg)
-Refer to Figure 13-6. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, JIP = Planned Investment, G = Government Purchases. Further, IP and G are autonomous. Suppose government purchases rise by $100. As a result,
A) the aggregate expenditures curve shifts upward by $100.
B) there is a movement along the aggregate expenditures curve from $1,600 to $1,700.
C) the aggregate expenditures curve shifts upward by $100 * the multiplier.
D) there is a movement along the aggregate expenditures curve from $1,600 to an amount equal to [$1,600 + ($100 * the multiplier) ].
Correct Answer:
Verified
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