If Net Exports Fall $20 Billion and the MPC Is

question 211

Multiple Choice

If net exports fall $20 billion and the MPC is 7/10 and there is a multiplier effect,but no crowding out and no investment accelerator,then

• A) aggregate demand falls by 10/3 x $20 billion.
• B) aggregate demand falls by 7/3 x $20 billion.
• C) aggregate demand falls by 7/10 x $20 billion.
• D) None of the above is correct.

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Definitions:

Sprain

An injury to a ligament caused by tearing or stretching beyond its capacity, often occurring in ankles, knees, or wrists.

Hot Compresses

Therapeutic applications of warmth to body parts using a cloth soaked in hot water or a heating pad to relieve pain or discomfort.

Open Wound

A type of injury where the skin is torn, pierced, or cut, leading to an exposed underlying tissue and possibly an increased risk of infection and bleeding.

Ice Pack

A plastic bag filled with ice or gel that can be applied to different parts of the body to reduce swelling and alleviate pain.