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

Name: Suppose that the slope of the AE curve is 0.75. Then a $100 decrease in autonomous spending causes equilibrium expenditure to
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The multiplier is calculated as 1/(1-slope of AE curve) = 1/(1-0.75) = 4. Therefore, a $100 decrease in autonomous spending results in a $400 decrease in equilibrium expenditure (100 * 4 = 400).

Suppose That the Slope of the AE Curve Is 0