Question

Assuming no crowding-out, investment-accelerator, or multiplier effects, a $100 billion increase in government expenditures shifts aggregate demand a. left by $100 billion. b. right by $100 billion. c. left by more than $100 billion. d. right by more than $100 billion.

Answer 1

d. right by more than $100 billion.

Step-by-step explanation:

In the case when the component of an aggregate demand changed because of the presence that means there is a multiplier so there is an increase in the output that should be more than the starting changes in the aggregate demand

So this is because when the aggregate demand curve shift righwards by having more than $100 billion

Therefore the option d is correct