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Suppose there are both multiplier and crowding out effects but without any accelerator effects. An increase in government expenditures would    a. always shift aggregate demand right by a smaller amount than the increase in government expenditures.     b. always shift aggregate demand right by a larger amount than the increase in government expenditures.     c. shift aggregate demand right by a larger, equal, or smaller amount than the increase in government expenditures.     d. always shift aggregate demand right by the same amount as the increase in government expenditures.

Suppose there are both multiplier and crowding out effects but without any accelerator effects. An increase in government expenditures would    a. always shift aggregate demand right by a smaller amount than the increase in government expenditures.     b. always shift aggregate demand right by a larger amount than the increase in government expenditures.     c. shift aggregate demand right by a larger, equal, or smaller amount than the increase in government expenditures.     d. always shift aggregate demand right by the same amount as the increase in government expenditures.

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government
Section: Chapter Questions
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Suppose there are both multiplier and crowding out effects but without any accelerator effects. An increase in government expenditures would 

  a. always shift aggregate demand right by a smaller amount than the increase in government expenditures.  
  b. always shift aggregate demand right by a larger amount than the increase in government expenditures.  
  c. shift aggregate demand right by a larger, equal, or smaller amount than the increase in government expenditures.  
  d. always shift aggregate demand right by the same amount as the increase in government expenditures.

 

 
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