Assume That There Is No Accelerator Affect

question 44

Multiple Choice

Assume that there is no accelerator affect.The MPC = 3/4.The government increases both expenditures and taxes by $600.The effect of taxes on aggregate demand is 3/4 the size of that created by government expenditures alone.The crowding out effect is 1/5 as strong as the combined effect of government expenditures and taxes on aggregate demand.How much does aggregate demand shift by?

• A)$1480
• B)$480
• C)$160
• D)None of the above is correct.

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Definitions:

Key Accounts

Large, significant customers that contribute a substantial portion of a company's revenue.

Undifferentiated

Marketing strategy that targets a broad market with a generic message and product, ignoring segment differences.

Break-even

The point at which total costs and total revenues are equal, resulting in no net loss or gain for a business.

Geographical Sales Territories

Designated regions or areas assigned to sales representatives as their specific area of responsibility.