WebMar 24, 2024 · At Y = $7,500, AE1 = $5,300 + 1,000 + 1,400 − 200 = $7,500. A reduction of net exports of $1,000 shifts the aggregate expenditures curve down by $1,000 to AE2. The equilibrium real GDP falls from $7,500 to $5,000. The new aggregate expenditures curve, AE2, intersects the 45-degree line at real GDP of $5,000. WebThe reason is that a change in aggregate expenditures circles through the economy: households buy from firms, firms pay workers and suppliers, workers and suppliers buy goods from other firms, those firms pay their workers and suppliers, and so on. In this way, the original change in aggregate expenditures is actually spent more than once.
Aggregate Expenditure: Investment, Government Spending, and …
WebAn aggregate expenditures curve assumes a fixed price level. If the price level were to change, the levels of consumption, investment, and net exports would all change, … WebStudy with Quizlet and memorize flashcards containing terms like aggregate expenditures, aggregate expenditures model, aggregate expenditures model formula and more. cef cable glands
Solved 18. In the aggregate expenditures model, an increase
Web2) The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by the level of aggregate expenditure. 3) A decrease in consumer confidence can put your job at risk if aggregate expenditures fall. 4) Household spending on goods and services is known as consumption spending. WebGraphically, the aggregate expenditure function is formed by adding together (or stacking on top of each other) the consumption function (after taxes), the investment function, the government spending function, and the net export function. In its most basic form, the graph of aggregate expenditures looks like the graph shown in Figure 5. WebExpert Answer. Answer Option 2 The expenditure mul …. The expenditure multiplier concept of the aggregate-expenditures model Multiple Choice is not at all relevant in the AD/AS model magnifies the shifts of the aggregate demand curve explains movement up or down the aggregate demand curve. cefcache文件夹