G If investment decreases by $20 billion and the economy's MPC is 0.5, the aggregate demand curve will shift A) leftward by $20 billion at each price level. B) rightward by $20 billion at each price level. C) leftward by $40 billion at each price level. D) rightward by $40 billion at each price level.

The answer is C

Explanation:

Multiplier effect = 1 ÷ (1-MPC)

MPC(Marginal Propensity to Consume) = 0.5

1 - 0.5 = 0.5

So we have;

1 ÷ 0.5

2

And the investment decreases by $20 billion.

Therefore we have:

2 x $20 billion = $40billion.

Because it is a decrease, the aggregate demand curve will shift to the left at each price level.

If it is an increase, the aggregate demand curve will shift to the right

the best way to learn how to declare a major is to talk to a admissions office.

fnfjfjjfjf nh ngngnfnfnfnnfn