Assuming that the aggregate price level is constant, the interest rate is fixed, and there are no taxes on foreign trade, how much will the aggregate demand curve shift and in what direction if the following events occur?
A. An autonomous increasein consumer spending of $25 billion; the marginalpropensity to consume is 2/3.
B. Firms reduce investment spending by $40 billion; the marginal propensity to concume is .08.
C. The government increases its purchases of military equipment by $60 billon; the marginal propensity to consume is .06.
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