Use the following to answer questions . Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Further, I_P 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)].

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When government purchases increase by $100, the aggregate expenditures curve shifts upward by the same amount, $100, because government purchases are a component of aggregate expenditures.

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