Which of the following events shifts the aggregate expenditure curve and also shifts the aggregate demand curve? I.a decrease in investment
II.a change in the price level
III.an increase in exports
A)I and II
B)I and III
C)II and III
D)I, II, and III
E)none of the above

Question

Quizplus · Accepted Answer

I. A decrease in investment would shift the aggregate expenditure curve to the left, as less spending is occurring in the economy.
II. A change in the price level would shift the aggregate expenditure curve and the aggregate demand curve. An increase in the price level would shift the aggregate expenditure curve to the left, as purchasing power is reduced. At the same time, it would shift the aggregate demand curve to the right, as higher prices lead to more production and GDP.
III. An increase in exports would shift the aggregate expenditure curve to the right, as more money is flowing into the economy. It would also shift the aggregate demand curve to the right, as exports are a component of aggregate demand.

Which of the Following Events Shifts the Aggregate Expenditure Curve