An increase in spending by $5 bilion will add OA drectly to isposable income by this amount and cause an increase in national income equal to less than $5 billion due to the multiplier effect. OB. directly to aggregate demand by this amount and lead to an eventual change in national income equal to $5 bilion times the simple multiplier. OC. indirectly to aggregate demand and cause an eventual change in national income equal to $5 billion. OD. indirectly to disposable income, only a fraction of which (determined by the MPC) will then be spent, Le. national income will change by less than $5 billion.

An increase in spending by $5 bilion will add OA drectly to isposable income by this amount and cause an increase in national income equal to less than $5 billion due to the multiplier effect. OB. directly to aggregate demand by this amount and lead to an eventual change in national income equal to $5 bilion times the simple multiplier. OC. indirectly to aggregate demand and cause an eventual change in national income equal to $5 billion. OD. indirectly to disposable income, only a fraction of which (determined by the MPC) will then be spent, Le. national income will change by less than $5 billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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