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:

Iron

A mineral essential for the body, primarily involved in the creation of red blood cells and the transportation of oxygen in the blood.

Zinc

An essential mineral important for immune function, wound healing, DNA synthesis, and cell division.

Alfredo Sauce

A rich and creamy sauce made with butter, heavy cream, and Parmesan cheese, often served over pasta.

Fat

A macronutrient important for energy storage, hormone production, and insulation, but excessive intake can lead to health issues.