If the Multiplier Is 4

question 162

Multiple Choice

If the multiplier is 4.0 and investment decreases by $2.5 billion, the AD curve

• A) shifts rightward by $10 billion.
• B) shifts rightward by less than $10 billion.
• C) shifts leftward by $10 billion.
• D) shifts leftward by more than $30 billion.

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Definitions:

Products And Methods

The goods produced and the techniques used in the creation of those goods, reflecting the efficiency and innovations in the manufacturing or service process.

Replacing Old

involves updating or substituting older products, methods, or technologies with newer ones to improve efficiency, functionality, or relevance.

Outward Shift

An increase in a country's production possibility frontier, indicating an expansion in its capacity to produce goods and services.

Production Possibilities Curve

An illustrative chart depicting the optimal output possibilities of two different goods or services that an economy can reach with full and efficient use of all available resources.