Multiple Choice
Assuming the crowding-out effect but no multiplier or investment-accelerator effects, what is the effect of a $500 billion increase in government expenditures on the aggregate demand or supply?
A) It shifts the aggregate demand right by more than $500 billion.
B) It shifts the aggregate demand right by less than $500 billion.
C) It shifts the aggregate supply left by more than $500 billion.
D) It shifts the aggregate supply left by less than $500 billion.
Correct Answer:

Verified
Correct Answer:
Verified
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