Question: Potential GDP 1,000 AE, AE 800 700 600 AAE Aggregate Expenditure (dollars) 400 200 AY 45 0 0 200 400 600 700 800 1,000 Real

Potential GDP 1,000 AE, AE 800 700 600 AAE Aggregate Expenditure

Potential GDP 1,000 AE, AE 800 700 600 AAE Aggregate Expenditure (dollars) 400 200 AY 45 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) In the figure, which of the following is true? The increase in expenditure (AEO to AE1) is larger than the increase in equilibrium output. O The increase in expenditure (AEO to AE1) is smaller than the increase in equilibrium output. O The increase in expenditure (AEO to AE1) is the same as the increase in equilibrium output. O The increase in expenditure (AEO to AE1) has no impact on equilibrium output

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