As real GDP ________, aggregate planned expenditure ________.
A) increases; increases
B) increases; decreases
C) decreases; remains the same, because it is independent from real GDP
D) increases; remains the same, because the increase in some components is precisely offset by the decrease in others
E) decreases; increases

Question

Quizplus · Accepted Answer

As real GDP increases, aggregate planned expenditure typically increases because higher income levels lead to higher consumption and investment, which are components of aggregate expenditure.

As Real GDP ________, Aggregate Planned Expenditure ________

As Real GDP , Aggregate Planned Expenditure