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Unformatted text preview: • The slope of the AE curve determines the magnitude of the multiplier. o The steeper the AE curve, the greater is the increase in induced expenditure that results from a given increase in real GDP. o Income taxes and imports both make the AE curve less steep and the multiplier smaller than it otherwise would be. Aggregate Planned Expenditure and aggregate Demand An increase in planned investment Aggregate expenditure and aggregate demand • The aggregate planned expenditure curve is the relationship between aggregate planned expenditure and real GDP, with all other influences on aggregate planned expenditure remaining the same. • The aggregate demand curve is the relationship between the quantity of real GDP demanded and the price level, with all other influences on aggregate demand remaining the same....
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 Three '11
 ProfAssorted
 Finance, Macroeconomics, Supply And Demand, Keynesian economics, Consumption function, aggregate planned expenditure

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