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The Keynesian cross model of an economy with an equilibrium level of income, E, is shown at right. Suppose the price level changes and the
The Keynesian cross model of an economy with an equilibrium level of income, E, is shown at right. Suppose the price level changes and the aggrgegate expenditure line shifts to C + 1 + G + X' In this case, the price level O A. is unchanged and there will be a movement downward along the aggregate demand curve (not shown) O B. has fallen and there will be a movement upward along the aggregate demand curve (not shown) O C. has fallen and there will be a movement downward along the aggregate demand curve (not shown). O D. has risen and there will be a movement upward along the aggregate demand curve (not shown)
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