Figure 84 Alt Text for Figure 8

Figure 8.4 Alt text for Figure 8.4: In figure 8.4, a graph comparing real GDP and real aggregate expenditure.
Long description for Figure 8.4: The x-axis is labelled, real GDP, Y (trillions of 2002 dollars) .The y-axis is labelled, real aggregate expenditure, AE (trillions of 2002 dollars) .Line AE1, begins a little less than half way along the x-axis and slopes up to the end of the x-axis.Line AE2, begins half way along the x-axis and slopes up to the top right corner.Line AE2 is to the right of line AE1 and is on a similar path as line AE1.Line Y = AE, originates at the vertex and slopes up to the top right corner.Line Y = AE meets line AE2 at point K, half way along both lines.Line Y = AE meets line AE1 at point N, plotted close to the right end of line AE1.Point J is plotted a little less than half way along line AE2, to the left of point K.Point L is marked close to the right end of line AE2, to the right of point K.
-Refer to Figure 8.4.If the Canadian economy is currently at point K, which of the following could cause it to move to point N?

A) The price level in Canada falls relative to the price level in other countries.
B) The federal government abolishes investment tax incentives.
C) The interest rate rises.
D) Household wealth declines.
E) Government spending falls.

Correct Answer:

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