Another determinate of aggregate expenditure is the level of investment. Your re

Question

Another determinate of aggregate expenditure is the level of investment. Your results correspond to and investment level of $50 billion. Suppose investment decreases by $ 20 billion, ending up at $ 30 billion; you can see how this affects the model by entering 3D in the investment box in the calculator. At this level of investment calculate once again the aggregate output demanded at price levels of 100, 120, and 140. Use the red points (cross symbol) to plot your results on the previous graph. The effect of the$20 billion decrease in investment is a the aggregate demand curve by which implies that the simple spending multiplier is

Explanation / Answer

Ceteris paribus, if investment decreases by $20 billion, aggregate demand will also decreases by $20 billion, provided there is no multiplier effect.

Even with a multiplier effect, aggregate demand decreases and AD curve shifts leftward from curent position.

You have neither provided the consumption function/MPC/Multiplier values, nor the complete graph using which I can tell you the exact data values.

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