Q:
In the aggregate expenditures model, it is assumed that investment
Answer & Explanation
Answer: A) does not change when real GDP changes
Explanation: In the aggregate expenditures model, it is assumed that investment does not change when real GDP changes.
- The aggregate expenditure is the sum of all the expenditures undertaken in the economy by the factors during a specific time period.
- The aggregate expenditure determines the total amount that firms and households plan to spend on goods and services at each level of income.
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