Scenario 34-2.The following facts apply to a small,imaginary economy.
• Consumption spending is $6,720 when income is $8,000.
• Consumption spending is $7,040 when income is $8,500.
-Refer to Scenario 34-2.In response to which of the following events could aggregate demand increase by $1,500?
A)A stock-market boom increases households' wealth by $500,and there is an operative crowding-out effect.
B)A stock-market boom increases households' wealth by $575,and there is an operative crowding-out effect.
C)An economic boom overseas increases the demand for U.S.net exports by $600,and there is no crowding-out effect.
D)Aggregate demand could increase by $1,500 in response to any of these events.

Question

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The Answer of Scenario 34-2.The following facts apply to a small,imaginary economy.
• Consumption spending is $6,720 when income is $8,000.
• Consumption spending is $7,040 when income is $8,500.
-Refer to Scenario 34-2.In response to which of the following events could aggregate demand increase by $1,500?
A)A stock-market boom increases households' wealth by $500,and there is an operative crowding-out effect.
B)A stock-market boom increases households' wealth by $575,and there is an operative crowding-out effect.
C)An economic boom overseas increases the demand for U.S.net exports by $600,and there is no crowding-out effect.
D)Aggregate demand could increase by $1,500 in response to any of these events.