Suppose the multiplier has a value that exceeds 1,and there are no crowding out or investment accelerator effects.Which of the following would shift aggregate demand to the right by more than the increase in expenditures?
A)an increase in government expenditures
B)an increase in net exports
C)an increase in investment spending
D)All of the above are correct.

Question

Quizplus · Accepted Answer

When the multiplier is greater than 1, any initial increase in expenditures (government, net exports, or investment) will lead to a more than proportional increase in aggregate demand, shifting it to the right.

Suppose the Multiplier Has a Value That Exceeds 1,and There