Multiple Choice
If net exports fall $40 billion, the MPC is 9/11, and there is a multiplier effect but no crowding out and no investment accelerator, then
A) aggregate demand falls by 2 × $40 billion.
B) aggregate demand falls by 11/2 × $40 billion.
C) aggregate demand falls by 11/9 × $40 billion.
D) aggregate demand falls by 9/11 × $40 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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