Suppose a Country Institutes an Investment Tax Credit and That

question 168

Multiple Choice

Suppose a country institutes an investment tax credit and that leads to an increase in investment spending of $100 billion.Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion.This action is

• A)expansionary and will shift the aggregate demand curve to the right by $7,500 billion.
• B)expansionary and will shift the aggregate demand curve to the right by $1,500 billion.
• C)expansionary and will shift the aggregate demand curve to the left by $7,500 billion.
• D)expansionary and will shift the aggregate demand curve to the left by $1,500 billion.

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Definitions:

Hypnosis

A trance-like state of focused attention, reduced peripheral awareness, and an enhanced capacity to respond to suggestion.

Physical Strength

The maximum force that muscles can exert against some form of resistance in a single effort.

Childhood Memories

Recollections of past experiences and events that occurred during one's childhood years, influencing personality and psychological development.

Hypnosis

A state of heightened suggestibility, focused attention, and relaxation, often used for therapeutic purposes.