Suppose the Multiplier Has a Value That Exceeds 1,and There

question 33

Multiple Choice

Suppose the multiplier has a value that exceeds 1,and there are no crowding out or investment accelerator effects.Which of the following would shift aggregate demand to the right by more than the increase in expenditures?

• A)an increase in government expenditures
• B)an increase in net exports
• C)an increase in investment spending
• D)All of the above are correct.

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Definitions:

Short-Run Average Cost

The average cost of production per unit in the short term, where some inputs are fixed and others are variable.

U-Shaped

A graphical representation showing a particular relationship where initial and end values are higher than those in the middle, resembling a "U" shape.

Returns To Scale

The change in output resulting from a proportional increase in all inputs in the production process.

Procedural Safeguards

These are legal protections designed to ensure that individuals' rights are preserved during legal or administrative processes.