Figure 34-6

question 383

Multiple Choice

Figure 34-6. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.

-Refer to Figure 34-6. Suppose the multiplier is 5 and the government increases its purchases by $15 billion. Also, suppose the AD curve would shift from AD1 to AD2 if there were no crowding out; the AD curve actually shifts from AD1 to AD3 with crowding out. Also, suppose the horizontal distance between the curves AD1 and AD3 is $55 billion. The extent of crowding out, for any particular level of the price level, is

• A) $75 billion.
• B) $40 billion.
• C) $30 billion.
• D) $20 billion.

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Definitions:

Plant Productivity

The measure of the efficiency with which a production or manufacturing facility converts inputs into outputs.

Communication Approach

The strategies or methods employed in conveying messages or information effectively among individuals or groups.

Directive

An instruction or order given by an authority, guiding actions or strategies in a specific direction.

Filtering and Status Effects

Filtering and status effects in communication occur when messages are altered or lost due to hierarchical differences, leading to potential misunderstandings and the under-representation of certain viewpoints.