If the income multiplier is 2 and the equilibrium national income level is $8,000 billion, then a $500 billion decrease in aggregate expenditure will cause
a. the aggregate expenditure curve to shift to the right and national income to increase by $1,000 billion
b. the aggregate expenditure curve to shift to the left and national income to decrease by $1,000 billion
c. the aggregate expenditure curve to shift to the right and national income to increase by $2,000 billion
d. the aggregate expenditure curve to remain unchanged but an upward movement along the curve that shows a $2,000 increase in national income
e. the aggregate expenditure curve to remain unchanged but an upward movement along the curve that shows a $2,000 decrease in national income
B
You might also like to view...
For a borrower in a (c,c') graph, the optimal consumption bundle is
A) to the left of the endowment point. B) to the right of the endowment point. C) on the endowment point. D) dependent on other factors.
An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are
A. normal goods. B. inferior goods. C. complementary goods. D. substitute goods.
If a firm has established monitoring devices that have a 50% chance of detecting shirking, and an employee gains $5,000 from shirking, the employer can deter shirking by having employees post a bond equal to
A) $2,500. B) $5,000. C) $10,000. D) $50,000.
The free floating exchange rate system has been in effect since
A. 1900. B. 1933. C. 1945. D. 1973.