b. Business taxes increase.Planned Aggregate Expenditure (PAE billions $)PAE = YPAE,Aggregate Output or GDP (Y billions $)c. A decrease in aggregate income will:cause a downward movement along the PAE curve.O shift the PAE curve upwards.O shift the PAE curve downwards.O cause an upward movement along the PAE curve. Show what happens to the planned aggregate expenditure curve in each of the following scenarios.Instructions: Drag the PAE curve in the appropriate direction to illustrate the impact of the stated change.a. Government spending increases.Planned Aggregate Expenditure (PAE billions $)PAE = YPAE1Aggregate Output or GDP (Y billions $)

The macroeconomic policies and factors are clearly responsible for estimating the several features…

b. Business taxes increase. Planned Aggregate Expenditure (PAE billions $) PAE = Y PAE, Aggregate Output or GDP (Y billions $) c. A decrease in aggregate income will: cause a downward movement along the PAE curve. O shift the PAE curve upwards. shift the PAE curve downwards. cause an upward movement along the PAE curve.

b. Business taxes increase. Planned Aggregate Expenditure (PAE billions $) PAE = Y PAE, Aggregate Output or GDP (Y billions $) c. A decrease in aggregate income will: cause a downward movement along the PAE curve. O shift the PAE curve upwards. shift the PAE curve downwards. cause an upward movement along the PAE curve.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.8P

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