Economics for Today 9th Edition by Irvin Tucker

Exercise 23

Assume an economy is in recession and the marginal propensity to consume (MPC) decreases then which of the following is true ?
A) It takes the same increase in autonomous aggregate expenditures to shift the aggregate expenditure curve upward to the full-employment real GDP level.
B) It takes a smaller decrease in autonomous aggregate expenditures to shift the aggregate expenditures curve upward to the full-employment real GDP level.
C) It takes a larger increase in autonomous aggregate expenditures to shift the aggregate expenditures curve upward to the full-employment real GDP level.
D) It takes the same decrease in autonomous aggregate expenditures to shift the aggregate expenditures curve downward to the full-employment real GDP level.