Imagine That the Government Increases Its Spending by $75 Billion

question 78

Multiple Choice

Imagine that the government increases its spending by $75 billion.Which of the following by itself would tend to make the change in aggregate demand different from $75 billion?

• A)both the multiplier effect and the crowding-out effect
• B)the multiplier effect,but not the crowding-out effect
• C)the crowding-out effect,but not the multiplier effect
• D)neither the crowding out effect nor the multiplier effect

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