Answer
Aggregate demand might increase by more than 3 billion dollars due to the multiplier effect being greater than the crowding-out effect. (The multiplier effect is the total of the additional shifts in the aggregate demand that result when income increases and consumer spending also increases.)
Work Step by Step
Aggregate demand might increase by less than 3 billion dollars if the crowding-out effect is greater than the multiplier effect. (The crowding-out effect is when the interest rate increases and investment spending decreases.)
