Question

One of the most important things to understand about the Income-Expenditure model is that as GDP (or national income) increases ________ increases as well.

Answer 1

Answer:

B. aggregate expenditure

Explanation:

Options are "A. aggregate demand B. aggregate expenditure C. aggregate supply"

One of the most important things to understand about the Income-Expenditure model is that as GDP (or national income) increases, Aggregate Expenditure increases as well. When income or GDP increases along with that, the Aggregate expenditure also rises. The GDP and Aggregate Expenditure shares positive relationship in the long run.