Assume the multiplier is 5 and that the crowding-out effect is $20 billion. An increase in government purchases of $10 billion will shift the aggregate-demand curve to the
A) right by $150 billion.
B) right by $70 billion.
C) right by $30 billion.
D) None of the above is correct.
Correct Answer:
Verified
Q67: The multiplier effect
A)and the crowding-out effect both
Q69: An increase in the MPC
A)increases the multiplier,so
Q245: If taxes
A)increase, then consumption increases, and aggregate
Q246: Scenario 21-2. The following facts apply to
Q247: Assume the MPC is 0.75. Assuming only
Q248: If the MPC is 3/4 then the
Q250: An increase in government purchases is likely
Q251: Suppose that the MPC is 0.60; there
Q253: Scenario 21-2. The following facts apply to
Q254: If the marginal propensity to consume is
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents