An increase in investment demanded will shift the aggregate demand curve to the right by an...
An increase in investment demanded will shift the aggregate demand curve to the right by an amount equal to the
A money multiplier.
B investment spending multiplier.
C change in investment.
D marginal propensity to consume.
Homework Answers
Answer B. Investment spending multiplier
Reason- Investment spending multiplier= ∆Y/∆I= 1/(1-MPC)=1/MPS
If investment demanded increases by $2 billion, multipier is 3, aggregate demand will rise by 3*$2 billion= $6 billion
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