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

question 28

Multiple Choice

Assuming the crowding-out effect but no multiplier or investment-accelerator effects, what is the effect of a $500 billion increase in government expenditures on the aggregate demand or supply?

• A)It shifts the aggregate demand right by more than $500 billion.
• B)It shifts the aggregate demand right by less than $500 billion.
• C)It shifts the aggregate supply left by more than $500 billion.
• D)It shifts the aggregate supply left by less than $500 billion.

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Definitions:

Motor Proteins

Proteins that convert chemical energy into mechanical work, facilitating movement within cells, such as the transportation of cellular cargoes.

Actin

A protein that forms filaments and is involved in various types of cell motility and structure.

Interphase Stages

The phase of the cell cycle during which a cell grows, replicates its DNA, and prepares for cell division, encompassing the G1, S, and G2 phases.

G1

A phase in the cell cycle during interphase, preceding DNA synthesis (S phase), where the cell grows and prepares for DNA replication.