Iq Assume the multiplier is 2 and there are no crowding-out effects. An initial decrease in government purchases of $ 1 00 billion will have what effect on aggregatedemand/real GDP? a. decrease it by $200 billion. b. increase it by $200 billion. c. decrease it by $50 billion. d. None of the above is correct. The Economy in 2008 in the first half of June 2008 the effects of a housing and nancial crisis coupled with a sharp increase in the price of oil were impacting the economy. is_ Refer to The Economy in 2008. The effects of the housing and nancial crises on consumers could be shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. 0. aggregate supply to the right. d. aggregate supply to the left. M ' Refer to the Economy in 2008. The effects of increased prices of oil on suppliers could be shown by shifting a. aggregate demand to the right. b. aggregate demand to the left. 0. aggregate supply to the right. d. aggregate supply to the left. ['1 Economist Keynes argued that the business cycle was due mostly to swings in a. aggregate or total demand b. aggregate or total supply c. tax rates d. ination 1 9" Which of the following tends to make aggregate demandireal GDP increase by more than the amount by which government expenditures increase? a. the crowding-out effect b. the multiplier effect c. the exchange-rate effect (1. the interest-rate effect i CL Assuming a multiplier effect, but no crowding-out effect, a $100 billion increase in government expenditures increases a. aggregate demand by more than $100 billion. b. aggregate demand by less than $100 billion. c. aggregate supply by more than $l00 billion. d. supply by less than $100 billion. 20 - If the MPC is 0.80 and there are no crowding-out effects, than an initial increase in Government Spending of $100 billion will eventually increase aggregate demandireal GDP after the multiplier is applied by a. $80 billion. b. $125 billion. c. $500 billion. d. $800 billion