If Households Save $40 Billion Less at Each Level of Income

question 40

Multiple Choice

If households save $40 billion less at each level of income and the MPC = 0.8,the aggregate expenditure line will

• A)not be affected
• B)shift upward by $40 billion
• C)shift downward by $40 billion
• D)shift upward by $200 billion because of the multiplier
• E)shift downward by $200 billion because of the multiplier

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