-In the above figure, AE₀is the aggregate planned expenditure curve and then investment increases by an additional $3 trillion. As a result, the new equilibrium GDP will be A) $12 trillion. B) $6 trillion. C) $3 trillion. D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The increase in investment will shift the aggregate planned expenditure curve to the right by $3 trillion. The new equilibrium GDP will be the point where the new aggregate planned expenditure curve intersects the 45-degree line. This point is at $12 trillion.

-In the Above Figure, AE0 is the Aggregate Planned Expenditure

-In the Above Figure, AE₀is the Aggregate Planned Expenditure