The graph below shows a 45°-line (Keynesian cross) diagram. The economy is currently in macroeconomic equilibrium at output level Yo. Suppose that investment increases. 1) Use the line tool to show a possible position for the new aggregate expenditures line. Label this line AE2. Note: if you are not prompted for a label, you have used the wrong drawing tool. 2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label this point 'B'. - Real aggregate expenditures, AE Y = AE AE Real GDP, Y
The graph below shows a 45°-line (Keynesian cross) diagram. The economy is currently in macroeconomic equilibrium at output level Yo. Suppose that investment increases. 1) Use the line tool to show a possible position for the new aggregate expenditures line. Label this line AE2. Note: if you are not prompted for a label, you have used the wrong drawing tool. 2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label this point 'B'. - Real aggregate expenditures, AE Y = AE AE Real GDP, Y
Chapter9: The Keynesian Model In Action
Section: Chapter Questions
Problem 3SQP
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