Assume the Multiplier Is 5 and That the Total Crowding-Out

question 208

Multiple Choice

Assume the multiplier is 5 and that the total crowding-out effect is $20 billion.An increase in government purchases of $10 billion when the multiplier is 5 will shift the aggregate demand curve

• A)right $150 billion.
• B)right $70 billion.
• C)right $30 billion.
• D)None of the above is correct.

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Definitions:

Manufacturing Process

The series of actions or steps taken to produce a finished product from raw materials.

Minimizes Loss

A strategy or approach aimed at reducing the impact or severity of potential financial losses in various contexts.

Objective

In legal and business terms, it refers to the external, observable aspects of something as distinct from internal thoughts or feelings.

Punish

the act of imposing a penalty on someone as retribution for an offense.