The slope of the aggregate expenditure curve equals the change in
A) autonomous expenditure divided by the change in real GDP.
B) real GDP divided by the change in planned expenditure.
C) government expenditure divided by the change in real GDP.
D) planned expenditure divided by the change in real GDP.

Question

Quizplus · Accepted Answer

The slope of the aggregate expenditure curve is equal to the change in planned expenditure divided by the change in real GDP. This is because the slope measures the relationship between changes in output and changes in spending, and planned expenditure represents the spending that is planned or expected at each level of output. The other options are not correct because they do not capture the relationship between changes in spending and changes in output.

The Slope of the Aggregate Expenditure Curve Equals the Change