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Homework answers / question archive / The aggregate expenditure curve
The aggregate expenditure curve...
a.Slopes down.
b.Is a 45-degree line.
c.Is the mirror image of aggregate demand.
d.Has a slope between 0 and 1.
The answer is (d) Has a slope between 0 and 1
The slope of the aggregate expenditures curve = change in aggregate expenditures / change in real GDP
Since change in real GDP > change in aggregate expenditures due to the multiplier effect, the slope will be less than 1.
All other options are incorrect as they make wrong claims about the aggregate expenditure curve