Suppose that a change in consumer preferences leads to a $50 billion decrease in net exports.
If the value of the multiplier is 3, what is the size of the shift in the aggregate demand after
The multiplier process works through the economy?

Question

Quizplus · Accepted Answer

If the multiplier is 3 and the shift in net exports is $50 billion, then the resulting shift in aggregate demand would be 3 times that amount, or $150 billion. Therefore, the correct answer is B) $100 billion, as the question asks about the size of the shift after the multiplier process has already taken place.

Suppose That a Change in Consumer Preferences Leads to a $50