The aggregate expenditure line shows total planned spending at each _____.
A)consumption level
B)investment level
C)income level,holding the price level constant
D)price level,holding the level of income constant
E)interest rate,holding the price level constant

Question

Quizplus · Accepted Answer

The aggregate expenditure line shows total planned spending at each income level, holding the price level constant. This is because aggregate expenditure is determined by consumption, investment, government spending, and net exports, all of which are influenced by income. Holding the price level constant allows us to analyze the relationship between total planned spending and income, without the complicating factor of changes in the price level.

The Aggregate Expenditure Line Shows Total Planned Spending at Each