What is the relationship between the aggregate planned expenditure curve and the aggregate demand curve? Explain the relationshi
What will be an ideal response?
The aggregate demand curve is derived using the aggregate planned expenditure curve. The aggregate planned expenditure curve shows how equilibrium expenditure changes when the price level changes. Then the aggregate demand curve plots the price level and the resulting equilibrium expenditure to illustrate how equilibrium expenditure (and hence the aggregate quantity of real GDP demanded) depends on the price level.
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Which of the following is the least tangible?
a. Social capital b. Physical capital c. Human capital d. All of these choices
A change in which of the following causes a movement along — not a shift in — the IS curve?
A) autonomous consumption B) government purchases C) financial frictions D) all of the above E) none of the above
What was not one of the government's strategies to pull the nation out of the Great Depression?
a. Large subsidies for manufacturing companies. b. Sizable increases in employment of emergency workers. c. Development of the Federal Deposit Insurance Corporation (FDIC). d. Institute price controls for farmers.