An increase in the Marginal Propensity to Save will:
(a) Increase the size of the multiplier.
(b) Increase the marginal propensity to consume.
(c) Decrease the size of the multiplier.
(d) Increase injections into the economy.
Answer: (c) Decrease the size of the multiplier.
You might also like to view...
You want to purchase two umbrellas. The price is $40 per umbrella, 2 for $60, 3 for $75. What will be the marginal cost to you of buying a third umbrella?
A) $75 B) $25 C) $20 D) $15 E) $10
Demand is price inelastic if a relatively ________ price increase leads to a relatively ________ in the quantity demanded
A) large; small increase B) small; large decrease C) large; small decrease D) small; large increase
Using Scenario 2 what would be the number of points that the testing company would have to award to make students indifferent between guessing and not guessing even when the student has eliminated three of the answers if it still wishes to impose a
five point penalty for guessing incorrectly. Would this be any different than awarding one point for correct answers and zero points for wrong answers?
When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy, then
A) inflation will be lower. B) output will be at its potential. C) output will be lower. D) inflation will not change. E) both A and B.