When the price level is fixed, how does an increase in the marginal propensity to import influence the slope of the AE curve and equilibrium expenditure?
The slope of the AE curve

Question

When the price level is fixed, how does an increase in the marginal propensity to import influence the slope of the  AE  curve and equilibrium expenditure? 
 The slope of the  AE  curve

Answer

increases, which increases equilibrium expenditure.

Answer

decreases, which decreases equilibrium expenditure.

Answer

increases, which decreases equilibrium expenditure.

Answer

decreases, which increases equilibrium expenditure.

Answer

decreases, but equilibrium expenditure does not change.

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When the price level is fixed, how does an increase in the marginal propensity t...

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