# Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ? Correct Answer: C. The aggregate demand curve shifts to the right by more than Rs 16 billion. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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

Direct Answer & Quick Reference

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

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 **(Correct Answer)**

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

✨ Explain with AI

Verified Key: C. The aggregate demand curve shifts to the right by more than Rs 16 billion
Solved by 3,584+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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