Indu Dhiman posted an Question
May 06, 2021 • 18:28 pm 30 points
  • UGC NET
  • Economics

Suppose that in 2006 the slope of the ae cyrve is 0.67 and in 2007 the slope of the ae curve changes to 0.8. which of the following best describes what happen t

suppose that in 2006 the slope of the AE cyrve is 0.67 and in 2007 the slope of the AE curve changes to 0.8. which of the following best describes what happen to the multiplier ?

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  • Reshma gupta best-answer

    multiplier = 1/(1 - slope of the AE curve). for 0.67, multiplier= 1/1-0.67 1/0.33=3.03 if 0.8 ae curve then multiplier would be = 1/ 1-0.8 1/0.2=5 multiplier would rise from 3 to 5.

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