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

question 170

Multiple Choice

Assuming the multiplier effect but no crowding-out or investment-accelerator effects,what is the effect of a $400 billion increase in government expenditures on the aggregate demand?

• A) It shifts the aggregate demand right by more than $400 billion.
• B) It shifts the aggregate demand right by less than $400 billion.
• C) It shifts the aggregate demand left by more than $400 billion
• D) It shifts the aggregate demand left by less than $400 billion.

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