aq13Feb1 - TRUE d. AD shows how planned purchases in...

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18 February 2003 Which of the following are TRUE regarding Aggregate Demand [AD] and Aggregate Expenditure [AE]? a. Both are C + I + G + (X – M); TRUE b. For AD, input prices vary; for AE they are fixed. FALSE; input prices are irrelevant to AD, which is only about real aggregate demand at varying output prices. Input prices vary as we move up and down LAS, or draw different SAS curves. c. For AD, output prices vary; for AE they are fixed.
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Unformatted text preview: TRUE d. AD shows how planned purchases in aggregate vary with real GDP, whereas AE shows how desired purchases in aggregate vary with the output price level. FALSE e. AE shows how planned purchases in aggregate vary with real GDP, whereas AD shows how desired purchases in aggregate vary with the output price level. TRUE f. AE slopes up because when real GDP rises, so does disposable income, so planned consumption increases. TRUE...
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This note was uploaded on 05/22/2011 for the course ECO 2013 taught by Professor Denslow during the Spring '05 term at University of Florida.

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