-Refer to Exhibit 10-6.If investment increases,it follows that A) the TE curve will shift upward,possibly passing through point 2. B) the TE curve will shift downward,possibly passing through point 3. C) the TE curve will not change but the economy will move from point 1 to point 3. D) the TE curve will not change but the economy will move from point 1 to point 2. E) At the new equilibrium position,Real GDP will necessarily be Q₁.

Question

Quizplus · Accepted Answer

An increase in investment leads to an increase in total expenditure (TE), causing the TE curve to shift upward.

-Refer to Exhibit 10-6.If Investment Increases,it Follows That