If the Multiplier Is 7 and If There Is No

question 308

Multiple Choice

If the multiplier is 7 and if there is no crowding-out effect,then a $50 billion increase in government expenditures causes aggregate demand to

• A) increase by $250 billion.
• B) increase by $175 billion.
• C) increase by $350 billion.
• D) None of the above are correct.

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Definitions:

Ego

The ego, in psychoanalytic theory, is the part of the personality that mediates between the demands of the id, the superego, and reality, playing a key role in decision making and maintaining one's sense of identity.

Id

In psychoanalytic theory, the part of the mind in which innate instinctive impulses and primary processes are manifest.

Id

In psychoanalytic theory, the part of the personality that contains our primal, instinctual drives and operates on the pleasure principle.

Ego

In psychoanalytic theory, the part of the personality that mediates between the demands of the id, superego, and reality.