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The graph below depicts the Aggregate Expenditure line for the island nation of Rusha – where the Rushes live. This graph depicts the Aggregate Expenditure line before a collapse in housing values leads to a large reduction in autonomous spending. You will, however, use this diagram to examine the effects of that event.A recent collapse in housing values has led autonomous spending to decrease by 1.2 trillion.Examine the effects of this decrease in housing values by identifying (1) the amount
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the economy is initially in equilibrium at output y where the aggregate expenditure ae line intersects the 45 degree line suppose that the price level in the economy increases this causes an 19299
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