FIGURE 21-3 -Refer to Figure 21-3.A shift in the aggregate expenditure function from AE₀ to AE₁ could be caused by A)a rise in the multiplier. B)a fall in the marginal propensity to consume. C)a rise in the marginal propensity to consume. D)an increase in desired investment expenditures. E)a decrease in desired investment expenditures.

Question

Quizplus · Accepted Answer

A rise in desired investment expenditures would shift the aggregate expenditure function to the right, from AE0 to AE1.

FIGURE 21-3 -Refer to Figure 21-3.A Shift in the Aggregate Expenditure Function