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:

Confidence Interval

An interval of values within which there is a given level of confidence (e.g., 95%) where the population value lies.

Increased Accuracy

The enhancement of precision or correctness in measurement, observation, or analysis.

Simple Random Sampling

A method of selecting a sample in which every member of the population has an equal chance of being chosen.

Youngsters

Youngsters refers to children and teenagers, often implying a focus on their development, education, and socialization.