Consider a Simple Aggregate Expenditure Model Where All Components of Aggregate

Multiple Choice

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If government purchases increases by $200 billion, the aggregate expenditures curve will shift up by

A) $200 billion.
B) $200 billion *the multiplier.
C) $200 billion * marginal propensity to consume.
D) $200 billion *(1 ÷ marginal propensity to consume) .