Multiple Choice
Assume that the MPC is 0.75.Assume that there is a multiplier effect and that the total crowding-out effect is $6 billion.An increase in government purchases of $10 billion will shift aggregate demand
A) left by $24 billion.
B) left by $36 billion.
C) right by $34 billion.
D) right by $36 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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