If households save $30 billion more at each level of income and the marginal propensity to consume (MPC)is 0.9,the aggregate expenditure line will _____.
A)intersect the 45-degree line at a real GDP of $30 billion
B)shift upward by $30 billion
C)shift downward by $30 billion
D)shift upward by $300 billion because of the multiplier effect
E)shift downward by $300 billion because of the multiplier effect

Question

Quizplus · Accepted Answer

The Answer of If households save $30 billion more at each level of income and the marginal propensity to consume (MPC)is 0.9,the aggregate expenditure line will _____.
A)intersect the 45-degree line at a real GDP of $30 billion
B)shift upward by $30 billion
C)shift downward by $30 billion
D)shift upward by $300 billion because of the multiplier effect
E)shift downward by $300 billion because of the multiplier effect

If Households Save $30 Billion More at Each Level of Income