Question 1
Refer to the information provided in Figure 23.12 below to answer the question(s) that follow.
Refer to Figure 23.12. Suppose the economy's aggregate expenditure line is
AE
2. A $10 million increase in planned investment causes aggregate equilibrium output to increase to
◦ $1,440.5 million.
◦ $1,510 million.
◦ $1,516.7 million.
◦ $1,525 million.
Question 2
As the
MPS decreases, the multiplier will
◦ increase.
◦ decrease.
◦ remain constant.
◦ either increase or decrease depending on the size of the change in investment.
