If consumers enjoy an increase in wealth due to stock market gains, which of the following combinations of events will mostly likely take place?
a. A downward shift of the aggregate expenditure line and a rightward shift of the AD curve
b. A downward shift of the aggregate expenditure line and a rightward shift of the AD curve.
c. An upward shift of the aggregate expenditure line and a leftward shift of the AD curve.
d. An upward shift of the aggregate expenditure line and a rightward shift of the AD curve.
e. An upward shift of the aggregate expenditure line and no shift in the AD curve.
D
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Government may intervene in markets
a. to regulate firms like public utilities. b. directly, like creating a public service like the delivery of mail. c. indirectly, like planning an d funding multipurpose water projects that provide electricity, flood control and irrigation . d. All of the above are ways government may intervene in markets.
In reality, the actual size of the multiplier is about
A. 1. B. 1.4. C. 2. D. 4.