Economic environments that have higher levels of planned aggregate expenditure for a given level of output have:
A) PAE curves that are higher on the expenditure diagram.
B) PAE curves that reflect higher levels of interest rates.
C) higher levels of imports.
D) higher levels of inventory.

Question

Quizplus · Accepted Answer

Planned aggregate expenditure (PAE) is the total amount of spending that will occur at each level of output in the economy. A higher level of planned aggregate expenditure means that there is more spending occurring at each level of output, which would result in a higher PAE curve on the expenditure diagram. Thus, option A is the correct answer. Options B, C, and D are not directly related to the level of planned aggregate expenditure.

Economic Environments That Have Higher Levels of Planned Aggregate Expenditure