Suppose households save $30 billion more at each level of income, and the MPC = 0.9.How will the aggregate expenditure line be affected?
A) It will shift upward by $30 billion.
B) It will shift downward by $30 billion.
C) It will shift upward by $300 billion because of the multiplier.
D) It will shift downward by $300 billion because of the multiplier.

Question

Suppose households save $30 billion more at each level of income, and the MPC = 0.9.How will the aggregate expenditure line be affected?  
A) It will shift upward by $30 billion. 
B) It will shift downward by $30 billion. 
C) It will shift upward by $300 billion because of the multiplier. 
D) It will shift downward by $300 billion because of the multiplier.

Quizplus · Accepted Answer

The Answer of Suppose households save $30 billion more at each level of income, and the MPC = 0.9.How will the aggregate expenditure line be affected?  
A) It will shift upward by $30 billion. 
B) It will shift downward by $30 billion. 
C) It will shift upward by $300 billion because of the multiplier. 
D) It will shift downward by $300 billion because of the multiplier.

Suppose Households Save $30 Billion More at Each Level of Income