The first question says: "In the context of the Aggregate Expenditure model, if aggregate expenditures are *0/1 greater than Real GDP, we can infer:"Please include explanations why you chose another answer for all 3.

Actual investment is less than planned investment. An unplanned fall in inventory occurs. O Output increases. Real GDP increases. Actual investment is less than planned investment. An unplanned fall in inventory X occurs. Output decreases. Real GDP increases. Actual investment is greater than planned investment. There is an unplanned increase in O inventories. Output decreases, GDP decreases. Actual investment is equal to planned investment. Output and Real GDP do not change. X How does a decrease in planned investment affect the aggregate expenditure *0/1 line? It decreases the slope of the aggregate expenditure line. X It increases the slope of the aggregate expenditure line. O It shifts the aggregate expenditure line downward. O It shifts the aggregate expenditure line upward. X Suppose that the Marginal Propensity to Save (MPS) in a small economy is 0.2 . *0/1 The government in this economy increases its expenditures by $10,000. Ceteris paribus, increase in government spending will: O Increase GDP by $10,000 O Decrease GDP by $10,000 X O Increase GDP by $12,500 O Increase GDP by $50,000