Suppose That Investment Decreases by $15 Billion

question 59

Multiple Choice

Suppose that investment decreases by $15 billion. If the multiplier is 2.5, the aggregate demand curve

• A)shifts leftward by a horizontal distance of $37.5 billion.
• B)shifts leftward by a horizontal distance greater than $37.5 billion.
• C)shifts leftward by a horizontal distance less than $37.5 billion.
• D)shifts upward by a vertical distance of $37.5 billion.
• E)is not affected.

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Definitions:

Stock Option Plan

A benefits program offered by companies that gives employees the option to buy company stock at a discounted price, often used as an incentive or reward.

Pay-as-you-Go

A financial strategy where expenses are paid for with current income rather than through borrowing or using existing savings.

Job Enrichment

A management strategy that enhances job content by adding tasks that increase responsibility, autonomy, and the scope of tasks performed.

Autonomy

The condition or quality of being autonomous; independence or the right to self-govern.