The multiplier process can occur when a decrease in investment spending
A. Increases household saving, causing consumers to buy more goods and services.
B. Increases household incomes, causing consumers to buy fewer goods and services.
C. Reduces household incomes, causing consumers to buy more goods and services.
D. Reduces household incomes, causing consumers to buy fewer goods and services.
Answer: D
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If a firm in a perfectly competitive industry is producing at a point where TR equals TC and the market demand increases, then the firm will be making
a. economic profits; it will expand output. b. economic profits; output will not change. c. normal profits; output will expand. d. normal profits; output will not change.
Discount rate policy is ________ tool of the Fed in its attempts to influence ________, and thus the money supply
A) an unnecessary, the reserve-holding ratio B) an unnecessary, high-powered money C) a necessary, the reserve-holding ratio D) a necessary, high-powered money
To reduce moral hazard, a firm may
A) pay workers at a piece rate. B) offer a year-end bonus if firm profits are up. C) offer stock options. D) All of the above.
A European recession that reduces U.S. net exports by $50 billion may ultimately lead to a $_____ billion reduction in aggregate demand if the MPC is 0.75
Fill in the blank(s) with correct word