Suppose That a Change in Consumer Preferences Leads to a $50

question 90

Multiple Choice

Suppose that a change in consumer preferences leads to a $50 billion decrease in net exports.
If the value of the multiplier is 3, what is the size of the shift in the aggregate demand after
The multiplier process works through the economy?

• A) $150 billion
• B) $100 billion
• C) Less than $50 billion
• D) Cannot be determined without information on exports

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Definitions:

Arctic Tundra

describes a cold, treeless biome found in the Arctic regions, characterized by permafrost, minimal precipitation, and short growing seasons.

Thick Fur

A dense layer of hair on animals that serves as insulation against cold temperatures and water.

Permafrost

A thick subsurface layer of soil that remains frozen throughout the year, occurring chiefly in polar regions.

Arctic Tundra

A cold, treeless region where the subsoil is permanently frozen, found in the Arctic circle.