I have difficulties with this topic, so please give me help in completing this. If real GDP and aggregate expenditure are less than
1) If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms’ inventories? How do firms change their production? And what happens to real GDP?
2) How do the marginal propensity to consume, the marginal propensity to import, and the income tax rate influence the multiplier?
3) How do fluctuations in autonomous expenditure influence real GDP?
4) How does a change in the price level influence the AE curve and the AD curve?
5) How does an increase in autonomous expenditure change real GDP in the short-run? Does real GDP change by the same amount as the change in aggregate demand? Why or why not?
6) If autonomous expenditure increases with no change in the price level, what happens to the AE curve and the AD curve? Which curve shifts by an amount that is determined by the multiplier and why?
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