Assume the multiplier is 5 and that the crowding-out effect is $30 billion. An increase in government purchases of $20 billion will shift the aggregate-demand curve to the Select one: a. right by $130 billion b. right by $70 billion c. right by $50 billion d. right by $10 billion

b. right by $70 billion

Explanation:

The computation of the amount that shift to the aggregate demand curve is shown below;

= Multiplier × government purchase - crowding out effect

= 5 × $20 billion - $30 billion

= $100 billion - $30 billion

= $70 billion

So it would right by $70 billion

hence, the correct option is b,

The other options seems incorrect

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough

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