The smaller the marginal propensity to save, other things constant, _____
a. the smaller the marginal propensity to consume
b. the larger the marginal propensity to consume
c. the smaller the multiplier
d. the flatter the consumption function
e. the steeper the saving function
b
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Regulation of the financial system
A) occurs only in the United States. B) protects the jobs of employees of financial institutions. C) protects the wealth of owners of financial institutions. D) ensures the stability of the financial system.
Suppose the current account shows debits of $5.3 billion and credits of $4.7 billion. The current account balance is ________, and the financial account balance is ________
A) +$0.6 billion; -$0.6 billion B) +$0.6 billion; +$0.6 billion C) -$0.6 billion; -$0.6 billion D) -$0.6 billion; +$0.6 billion
Suppose that many households look to the stock market to gauge how the economy is likely to perform in the future
When stock prices are rising, then households will be optimistic about the future state of the economy and will increase their spending on houses and consumer durables, such as cars and furniture. When stock prices are falling, then households will be pessimistic about the future and will cut back on their spending. If this view of the link between stock prices and household spending is correct, then what will be the effect of a decline in stock prices on output in the new Keynesian view? Be sure to distinguish the short run from the long run.
Collective consumption goods can lose their collective consumption characteristics as they get more crowded
a. True b. False