Solved

Assume the Multiplier Is 5 and That the Crowding-Out Effect

Question 38

Multiple Choice

Assume the multiplier is 5 and that the crowding-out effect is $30 billion.An increase in government purchases of $20 billion will shift the aggregate-demand curve to the


A) right by $130 billion.
B) right by $70 billion.
C) right by $50 billion.
D) right by $10 billion.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q31: A significant example of a temporary tax

Q33: If the MPC is 3/5 then the

Q33: Suppose the multiplier has a value that

Q34: In a certain economy,when income is $500,consumer

Q36: If Congress increases taxes to balance the

Q37: Which of the following events shifts the

Q39: Suppose the MPC is 0.9.There are no

Q41: Assume the following.<br>• The MPC has a

Q42: The multiplier effect is exemplified by the

Q43: Figure 34-5.On the figure,MS represents money supply