Multiple Choice
Assume that the MPC is 0.75. Assuming only the multiplier effect matters, how will an increase in government purchases of $200 billion shift the aggregate demand curve?
A) It will shift the aggregate demand curve left by $80 billion.
B) It will shift the aggregate demand curve left by $250 billion.
C) It will shift the aggregate demand curve right by $750 billion.
D) It will shift the aggregate demand curve right by $800 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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