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When deriving the aggregate demand (AD) curve from the aggregate expenditure mod

ID: 1090785 • Letter: W

Question

When deriving the aggregate demand (AD) curve from the aggregate expenditure model, an increase in U.S. product prices would cause an increase in: the value of household wealth and lower consumption expenditures. interest rates and lower investment expenditures. exports and imports. U.S. resource prices and an increase in aggregate supply. Suppose that the price level is constant and that investment decreases sharply. This would decrease aggregate expenditures and shift the aggregate expenditures curve upward. increase aggregate expenditures and shift the aggregate expenditures curve downward. increase aggregate expenditures and shift the aggregate expenditures curve upward, decrease aggregate expenditures and shift the aggregate expenditures curve downward.

Explanation / Answer

both option 4

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