When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

Which of the following is an automatic stabilizer ?

A. Spending on public schools

B. Military spending

C. All of these answers are automatic stabilizers

D. spending on the space shuttle

E. Unemployment benefits

Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

A. The aggregate supply curve shifts to the right by more than Rs 16 billion

B. The aggregate demand curve shifts to the left by more than Rs 16 billion

C. The aggregate demand curve shifts to the right by more than Rs 16 billion

D. the aggregate supply curve shifts to the left by more than Rs 16 billion

An increase in the marginal propensity to consumer (MPC) ?

A. raises the value of the multiplier

B. has no impact on the value of the multiplier?

C. rarely occurs because the MPC is set by congressional legislation

D. lowers the value of the multiplier

The initial impact of an increase in government spending is to shift ?

A. aggregate demand to the right

B. aggregate demand to the left

C. aggregate supply to the right

D. aggregate supply to the left

The initial effect of an increase in the money supply is to ?

A. increase the interest rate

B. increase the price level

C. decrease the price level

D. decrease the interest rate