The aggregate expenditure (AE)function is an upward- sloping curve that describes
A)what firms and households would like to spend at each level of national income.
B)what is actually spent at each level of national income.
C)the amount spent on an economy's output at each national income.
D)what is actually spent on an economy's output at each level of output.
E)what an economy would like to spend, in the absence of income constraints, at each level of output.

Question

Quizplus · Accepted Answer

The aggregate expenditure function describes what firms and households would like to spend at each level of national income. It is based on their desired spending and does not necessarily reflect actual spending.

The Aggregate Expenditure (AE)function Is an Upward- Sloping Curve That