use the line mover tool in the simple keynesian model to illustrate how a $500 million ($0.5 billion) increase in investment spending impacts the economy. then, use the point to identify the new equilibrium. note that in this simple keynesian model the line ae equals y is the reference line. the reference line shows where aggregate expenditure (ae) equals aggregate income (y). the aggregate expenditure line is c plus i, where c represents consumption and i represents investment.
