if real investment increases by $500 billion, the c + i + g+x curve will\na. shift up vertically by more…

if real investment increases by $500 billion, the c + i + g+x curve will\na. shift up vertically by more than $500 billion.\nb. shift up vertically by less than $500 billion.\nc. not shift.\nd. shift up vertically by $500 billion.

if real investment increases by $500 billion, the c + i + g+x curve will\na. shift up vertically by more than $500 billion.\nb. shift up vertically by less than $500 billion.\nc. not shift.\nd. shift up vertically by $500 billion.

Answer

Brief Explanations:

In the aggregate - expenditure model ($C + I+G + X$), an increase in real investment ($I$) directly adds to the total spending. The $C + I+G + X$ curve represents total planned spending in the economy. When investment increases by a certain amount, the curve shifts vertically by that exact amount because investment is one of the components of total spending.

Answer:

D. shift up vertically by $500 billion.