Author Question: What is the relationship between the slope of the aggregate expenditure curve and the expenditure ... (Read 145 times)

MGLQZ · **on:** Jun 29, 2018

What is the relationship between the slope of the aggregate expenditure curve and the expenditure multiplier?

What will be an ideal response?

Question 2

Moving along the short-run Phillips curve, a ________ unemployment rate can only be achieved by paying the cost of ________.

A) lower; a lower inflation rate
B) lower; a lower price level
C) lower; a higher expected inflation rate
D) lower; a higher inflation rate
E) higher; a higher inflation rate

princessflame2016 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The expenditure multiplier equals . This relationship exists regardless of the existence or absence of imports or income taxes.

Answer to Question 2

D