Multiple Choice
Assume the MPC is 0.75. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the
A) left by $200 billion.
B) left by $400 billion.
C) right by $800 billion.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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