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15) Assume the economy was at E iADAn Figure 11-2 and the government increased spending. If the aggregate demand curve initially shifted to AD2, but
15) Assume the economy was at E iADAn Figure 11-2 and the government increased spending. If the aggregate demand curve initially shifted to AD2, but then fell back to AD3, then we know that
A) the multiplier is larger than the government thought.
B) planned private investment spending unexpectedly increased.
C) the economy will experience an expansionary gap.
D) some planned private investment spending has been crowded out.
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