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-In the Above Figure the Economy Is Initially at Point

Question 235

Multiple Choice

-In the above figure the economy is initially at point A on the aggregate expenditure curve AE<sub>0</sub>. Suppose firms expect profits to increase and decide to increase investment. As a result A) the AE curve shifts upward to a curve such as AE<sub>2</sub>. B) the AE curve shifts downward to a curve such as AE<sub>1</sub>. C) there is a movement along AE<sub>0</sub> to a point such as B. D) there is a movement along AE<sub>0</sub> to a point such as C.
-In the above figure the economy is initially at point A on the aggregate expenditure curve AE0. Suppose firms expect profits to increase and decide to increase investment. As a result


A) the AE curve shifts upward to a curve such as AE2.
B) the AE curve shifts downward to a curve such as AE1.
C) there is a movement along AE0 to a point such as B.
D) there is a movement along AE0 to a point such as C.

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