Introduction to Economics 2 Deneme Sınavı Sorusu #349499

How does an increase in government expenditures affect the aggregate expenditure (AE) function?


An upward movement along the AE function

 

A downward movement along the AE function

 

An upward shift of the AE function as a whole

 

A downward shift of the AE function as a whole

No effect on the AE function


Yanıt Açıklaması:

If government authorities increase the expenditure, the G line actually shifts upward to position G1.If the expenditures are reduced, the G line shifts downward to G2.

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