Ask Question
15 May, 10:17

If investment increases by $10 billion, and the economy's MPC is 0.8, the aggregate demand curve will shift: Group of answer choicesleftward by $50 billion at each price level. rightward by $10 billion at each price level. rightward by $50 billion at each price level. leftward by $40 billion at each price level.

+4
Answers (1)
  1. 15 May, 11:09
    0
    rightward by $50 billion at each price level.

    Explanation:

    Any increase in aggregate expenditures resulting from changes in variables other than prices, will produce a rightward shift of the aggregate demand curve.

    MPC = 0.8, therefore MPS = 0.2

    the total change in the aggregate demand curve = $10 billion / 0.2 = 50 billion
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “If investment increases by $10 billion, and the economy's MPC is 0.8, the aggregate demand curve will shift: Group of answer ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers