ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 9, Problem 4.9P
To determine
The use of aggregate expenditure line to identify real
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(GDP Demanded) How is the aggregate expenditure line used to identify real GDP demanded assuming a given price level?
Which equation represents the macroeconomic equilibrium condition in the aggregate expenditure (AE) model?
What is the difference between aggregate expenditure and aggregate demand? Why is the aggregate demand curve downward sloping while the aggregate expenditure line is upward sloping?
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- What does it mean when the aggregate expenditure line crosses the 45-degree line? In other words, how would you explain the intersection in words?arrow_forwardWhat are the determinants of aggregate demand? How do these determinants differ from the determinants of aggregate expenditure? What is the significance, if any, of these differences?arrow_forwardMacroeconomic equilibrium occurs when aggregate expenditure = GDP. aggregate expenditure = C+ I + G + net transfers. aggregate income = planned inventories. aggregate income = planned inventories. 88. If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur? GDP will rise. GDP will fall. Wages will rise. Inventories will fall.arrow_forward
- What is the effect on aggregate expenditure if the value of exports exceeds the value of imports in a country?arrow_forwardIf economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?GDP will rise. GDP will fall. Wages will rise. Inventories will fall.arrow_forwardAfter writing down the Aggregate Expenditure (AE) equation of this economy, find the IS and LM equations, and mention the national income and the interest rate of this economy at the equilibrium level.arrow_forward
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