Because the short- run aggregate expenditure model assumes that the price level is , its predicted effect of changes in autonomous expenditure on equilibrium output is than the prediction of the AD/SAS model.

Question

Quizplus · Accepted Answer

The short-run aggregate expenditure model assumes that the price level is fixed, which means that changes in autonomous expenditure have a greater effect on equilibrium output compared to the AD/SAS model, where prices can adjust.

Because the Short- Run Aggregate Expenditure Model Assumes That the Price