Assuming the Multiplier Effect but No Crowding-Out or Investment-Accelerator Effects,what

question 137

Multiple Choice

Assuming the multiplier effect but no crowding-out or investment-accelerator effects,what is the effect of a $300 billion increase in government expenditures on the aggregate demand?

• A)It shifts the aggregate demand right by more than $300 billion.
• B)It shifts the aggregate demand right by less than $300 billion.
• C)It shifts the aggregate demand left by more than $300 billion
• D)It shifts the aggregate demand left by less than $300 billion.

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Definitions:

Corporation

A legal entity recognized by law as separate from its owners, capable of owning property, entering contracts, and being sued.

Par-value Share

A type of share that has a face value or nominal value assigned to it, which is the minimum price at which the shares can be issued.

Secured

A status indicating that a loan or credit has collateral attached to it, ensuring the lender's investment is protected.

Separate Legal Entity

The principle that a corporation exists separately from the people who created it.