The larger the multiplier, the ________ the AE curve and the ________ the AD curve from a given increase in investment.
A)steeper; greater the rightward shift of
B)steeper; greater the movement upward along
C)flatter; greater the rightward shift of
D)flatter; greater the movement upward along
E)steeper; greater the movement downward along

Question

Quizplus · Accepted Answer

The larger the multiplier, the steeper the AE curve because a larger multiplier means that a given change in investment leads to a larger overall increase in output and consumption. Additionally, the AD curve also shifts to the right because the increase in output and consumption leads to an increase in overall demand in the economy. Therefore, the correct answer is A) steeper; greater the rightward shift of.

The Larger the Multiplier, the ________ the AE Curve and the ________

The Larger the Multiplier, the the AE Curve and the