Q
Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
-
A
A. The aggregate supply curve shifts to the right by more than rs 16 billion
-
B
B. The aggregate demand curve shifts to the left by more than rs 16 billion
-
C
C. The aggregate demand curve shifts to the right by more than rs 16 billion
-
D
D. The aggregate supply curve shifts to the left by more than rs 16 billion
Correct Answer:
C. C. The aggregate demand curve shifts to the right by more than rs 16 billion
