Answer to Question #242253 in Macroeconomics for Olu

Question

Based on Aggregate expenditure model an increase in slope of the Aggregate expenditure function will cause AE to become

I.Steeper and a given change in autonomous consumption C0 to have a smaller effect on output
ii.Steeper and a given Change in autonomous consumption to have a larger effect on output
iii.Flatter and a given change in autonomous consumption to have a smaller effect on output
iv.,Flatter and a given change in autonomous consumption to have a larger effect on output

Answer 1

ii.Steeper and a given Change in autonomous consumption to have a larger effect on output