Assume the Multiplier Is 5 and That the Crowding-Out Effect

question 38

Multiple Choice

Assume the multiplier is 5 and that the crowding-out effect is $30 billion.An increase in government purchases of $20 billion will shift the aggregate-demand curve to the

• A)right by $130 billion.
• B)right by $70 billion.
• C)right by $50 billion.
• D)right by $10 billion.

---

Definitions:

REM Sleep

A stage of sleep characterized by rapid eye movements, more dreaming, and bodily movement; important for learning and memory consolidation.

Pons

The pons is a part of the brain located in the brainstem, playing a crucial role in controlling breathing, communication between different parts of the brain, and sensations such as hearing, taste, and balance.

Midbrain

The middle portion of the brainstem, involved in functions such as vision, hearing, motor control, and sleep/wake cycles.

Cranial Nerves

Twelve pairs of nerves that emerge directly from the brain, not the spinal cord, and pass through various foramina of the skull to innervate the head, neck, and visceral organs directly.