'Finance minister announces that the federal income-tax rate will rise by three percentage points." Assuming that aggregate output is demand-determined, the AE function will and equilibrium national income will O a. Become flatter; fall. O b. Shift up parallel to itself; rise. O c. Become steeper; rise. O d. Shift down parallel to itself; fall. O e. Not change; not change.

Which of the following is true? O An increase in aggregate demand is the same as a downward shift in the total expenditure function O An increase in aggregate demand is the same as an increase in aggregate supply O An inward shift of the aggregate demand curve is the same as an upward shift in the total expenditure function O An increase in aggregate demand is the same as an upward shift in the total expenditure function

Imagine a 45°-line (Keynesian cross) diagram in which the upward-sloping aggregate expenditure curve intersects the 45°-line at point A. The economy is currently in macroeconomic equilibrium at output level Y.. Suppose that the price level increases. If the price level increases, the aggregate expenditures line will shift down The new equilibrium levels of GDP and expenditures will be O A. where the new AE line intersects the 45°-line. O B. unchanged. OC. anywhere on the new AE line ⒸD. where the new AE line interesects the original AE line.

Assume that MPS is 0.4. If spending increases by $8 billion, then real GDP will increase by Multiple Choice O O O O $15 billion. $20 billion. $13.3 billion. $8 billion.