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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?


Definitions:

Daily Caloric Intake

The total number of calories a person consumes in one day, important for managing weight and nutritional health.

Carbohydrates

Organic compounds, including sugars, starches, and fiber, that are major sources of energy for the body.

Amino Acids

Organic compounds that combine to form proteins, serving as the building blocks of life.

Essential

Absolutely necessary; extremely important in a particular situation or for a specific process.

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