If the marginal propensity to save (MPS)decreases, the multiplier
A. stays the same.
B. increases.
C. decreases.
D. can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC).
Answer: B
You might also like to view...
An example of a situation in which the social costs are greater than the private costs would be
A. a physician who cannot examine patients with a stethoscope in an examination room adjacent to an airport. B. a new restaurant takes business away from an established restaurant. C. hand-held calculators putting slide rule manufacturers out of business. D. when a member of a rock band's ability to hear deteriorates from performing in so many loud concerts.
In the IBM case, the company was accused of violating the law that prohibits
A. firms from successfully achieving monopoly status. B. firms from using their monopoly in one market to increase market share in another. C. charging prices that are unfairly too high. D. firms from attempting to undercut competitors' prices.
What is the main difference between common and preferred stocks?
a. Common stocks pay interest whereas preferred stocks pay dividends. b. Preferred stocks carry voting rights whereas common stocks do not carry voting rights. c. Preferred stocks pay a guaranteed dividend, while common stocks may or may not pay dividends. d. In case of bankruptcy, preferred stockholders have a right to the company's asset, whereas common stockholders do not have such rights. e. Common stocks can be converted into preferred stocks while preferred stocks cannot be converted into common stocks.
Positive statements:
A) imply value judgments must be made. B) are factual and can be tested. C) deal with what ought to be. D) are dealt with primarily in microeconomics.