Scenario 21-1 $\$ 10,000$ , Consingtion Spending Is $\$ 6,500$ - Whan Income Is

Multiple Choice

Scenario 21-1. Take the following information as given for a small, imaginary economy:
- When income is $\$ 10,000$ , consingtion spending is $\$ 6,500$
- Whan income is $\$ 11,000$ , cansumption spending is $\$ 7,300$
-Refer to Scenario 21-1. For this economy, an initial increase of $500 in net exports translates into a

A) $2,000 increase in aggregate demand when the crowding-out effect is taken into account.
B) $2,500 increase in aggregate demand when the crowding-out effect is taken into account.
C) $2,000 increase in aggregate demand in the absence of the crowding-out effect.
D) $2,500 increase in aggregate demand in the absence of the crowding-out effect.