Suppose business confidence decreases causing a reduction in investment. Based on our understanding of the model presented in Chapter 3, we know with certainty that a reduction in investment will cause
A) an increase in the multiplier.
B) a reduction in the multiplier.
C) a reduction in the marginal propensity to save.
D) a reduction in consumption as the economy adjusts to this decrease in investment.
D
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With expansion in the level of output, total fixed cost:
a. declines but remains positive. b. increases. c. falls to zero. d. remains constant. e. becomes negative.
If a monopsonist increases its output by adding both capital and labor to production, which of the following will decline?
a. wage rate b. unemployment c. marginal cost of labor d. marginal physical product e. marginal revenue product
If natural resources had become scarcer, then we would expect their
a. prices to have risen more than inflation as they have. b. prices to have risen more than inflation, but they have not. c. known quantities to have fallen as they have. d. known quantities to have fallen but they have not.
Refer to the accompanying table below. The marginal cost of the 4th unit of activity is:Units of ActivityTotal CostTotal Benefit0$0$01$2$122$6$223$12$304$20$365$30$406$42$427$56$43
A. $10 B. $8 C. $6 D. $5