Suppose that the slope of the AE curve is 0.75. Then a $100 increase in autonomous spending causes equilibrium expenditure to

Name: Suppose that the slope of the AE curve is 0.75. Then a $100 increase in autonomous spending causes equilibrium expenditure to
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Question

Quizplus · Accepted Answer

The slope of the AE curve is the multiplier. So, a $100 increase in autonomous spending will cause equilibrium expenditure to increase by $100 * 0.75 = $750.

Suppose That the Slope of the AE Curve Is 0