Consider the relationship between the AE curve and the AD curve.A fall in the amount of desired consumption,investment,government purchases,or net exports at any given level of national income
A)shifts the AD curve to the left.
B)shifts the AD curve to the right.
C)causes a movement along the AD curve.
D)causes a movement along the AE curve.
E)causes a shift of the AE curve but no movement of the AD curve.

Question

Quizplus · Accepted Answer

A fall in the amount of desired consumption, investment, government purchases, or net exports at any given level of national income would shift the aggregate demand (AD) curve to the left, indicating a decrease in overall demand for goods and services in the economy. It is important to note that the AE (Aggregate Expenditure) curve is a graphical representation of the Keynesian model of national income determination, while the AD curve represents the relationship between overall demand and the price level in the economy. A shift in the AE curve may result from changes in one or more components of aggregate expenditure, which in turn can affect the AD curve.

Consider the Relationship Between the AE Curve and the AD