Multiple Choice
Assume that the MPC is 0.8. Assuming that only the multiplier effect matters, how will a decrease in government purchases of $15 billion shift the aggregate demand curve?
A) It will shift the aggregate demand curve left by $12 billion.
B) It will shift the aggregate demand curve left by $15 billion.
C) It will shift the aggregate demand curve right by $15 billion.
D) It will shift the aggregate demand curve left by $75 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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