I: The Classical Theory and the Keynesian Theory: An Introduction A. The Role of the Consumption Function B. Marginal Propensities to Consume and Save C. Why the Consumption Function Shifts and How It Affects Aggregate Demand D. The Role of the Investment Function E. Why Is Investment Demand Unstable? 1. Expectations 2. Technological change 3. Capacity utilization F. Investment as an Autonomous Expenditure G. Graphing the Aggregate Expenditure Function

I: The Classical Theory and the Keynesian Theory: An Introduction A. The Role of the Consumption Function B. Marginal Propensities to Consume and Save C. Why the Consumption Function Shifts and How It Affects Aggregate Demand D. The Role of the Investment Function E. Why Is Investment Demand Unstable? 1. Expectations 2. Technological change 3. Capacity utilization F. Investment as an Autonomous Expenditure G. Graphing the Aggregate Expenditure Function

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 5E

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What is the effect of an increase in investment? When investment increases, A. aggregate demand increases and income increases. The increase in income induçes an increase in consumption expenditure so aggregate demand increases by more than the initial increase in investment B. aggregate demand increases and aggregate supply increases C. aggregate demand increases by an amount equal to the increase in investment O D. aggregate supply increases. The increase in aggregate supply is greater than the increase in investment because capital increases, which increases potential GDP Click to select your answer. MacBook Air DII F11 F12 888 F10 F9 吕0 F7 F8 F6 F5 F4 esc F2 F3 F1 # $ delete @ 7 8 1 2 3 4 P Y Q W E R %3D tab つ K S D F G A aps lock M V B ootion * 00 I くO
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