Question: Figure 1 . On the left - hand graph, MS represents the supply of money and MD represents the demand for money; on the right

Figure 1. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphe
Refer to Figure 1. Suppose the multiplier is 3 and the government increases its purchases by $25 billion. Also, suppose the AD curve would shift from AD1 to AD2 if there were no crowding out; the AD curve actually shifts from AD1 to AD3 with crowding out. Finally, assume the horizontal distance between the curves AD1 and AD3 is $30 billion. The extent of crowding out, for any particular level of the price level, is
Select one:
a. $30 billion.
b. $25 billion.
c. $60 billion.
d. $45 billion.
Figure 1 . On the left - hand graph, MS

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