An Increase in Investment Demanded Will Shift the Aggregate Demand

question 110

Multiple Choice

An increase in investment demanded will shift the aggregate demand curve to the right by an amount equal to the _________.

• A) (∆I) where ∆I = change in investment
• B) (MPC * ∆I) where MPC = marginal propensity to consume
• C) (Im * ∆I) where Im = investment spending multiplier
• D) (Mm * ∆I) where m = money multiplier

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Definitions:

RPM

Stands for revolutions per minute, a unit of rotational speed indicating the number of turns made by an object in one minute.

Torque

The turning force developed by a motor.

Horsepower

A unit of measurement for power, particularly for engines and motors, representing the power needed to lift 550 pounds by one foot in one second.

Windings

Coils of wire that are used to create magnetic fields when electric current passes through them, found in generators, motors, and transformers.