The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero.

-Refer to Figure 10.4. Assume that the economy is initially at the equilibrium level E3. The economy can reach equilibrium level E1 if aggregate expenditure:
A) decreases by $200.
B) increases by $200.
C) decreases by $100.
D) increases by $100.
E) increases by $50.
Correct Answer:
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