Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. Which of the following causes the aggregate expenditures curve to shift upwards?
A) an increase in taxes
B) an increase in exports
C) a decrease in the national debt
D) a decrease in interest rate

Question

Quizplus · Accepted Answer

Since all components of aggregate expenditure are assumed to be autonomous except for consumption, an increase in exports (a component of net exports) would cause an upward shift in the aggregate expenditures curve. None of the other options would have an effect on autonomous aggregate expenditure components.

Consider a Simple Aggregate Expenditure Model Where All Components of Aggregate