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Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is $5,200 when income is $8,000. • Consumption spending is $5,536 when income is $8,400. Refer to Scenario 34-2. In response to which of the following events could aggregate demand increase by $1,500? An economic boom overseas increases the demand for U.S. net exports. a) toor ut effect

Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is $5,200 when income is $8,000. • Consumption spending is $5,536 when income is $8,400. Refer to Scenario 34-2. In response to which of the following events could aggregate demand increase by $1,500? An economic boom overseas increases the demand for U.S. net exports. a) toor ut effect

MACROECONOMICS
MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
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Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is $5,200 when income is $8,000. • Consumption spending is $5,536 when income is $8,400. Refer to Scenario 34-2. In response to which of the following events could aggregate demand increase by $1,500? a) An economic boom overseas increases the demand for U.S. net exports by $225, and there is no crowding-out effect. Ob) A stock-market boom stimulates consumer spending by $225, and there is an operative crowding-out effect. Oc) A stock-market boom stimulates consumer spending by $300, and there is an operative crowding-out effect. An economic boom overseas increases the demand for U.S. net exports by d) $300, and there is no crowding-out effect.
Transcribed Image Text:Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is $5,200 when income is $8,000. • Consumption spending is $5,536 when income is $8,400. Refer to Scenario 34-2. In response to which of the following events could aggregate demand increase by $1,500? a) An economic boom overseas increases the demand for U.S. net exports by $225, and there is no crowding-out effect. Ob) A stock-market boom stimulates consumer spending by $225, and there is an operative crowding-out effect. Oc) A stock-market boom stimulates consumer spending by $300, and there is an operative crowding-out effect. An economic boom overseas increases the demand for U.S. net exports by d) $300, and there is no crowding-out effect.
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