Along a linear consumption function,
A) the average propensity to consume rises with income, but the marginal propensity to consume falls with an increase in income.
B) the marginal propensity to consume rises with an increase in income.
C) the average propensity to consume falls with an increase in income.
D) both the average propensity to consume and the marginal propensity to consume rise with an increase in income.
C
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Which of the following are assets of commercial banks?
i. reserves ii. loans iii. deposits A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii
The most likely explanation of the recession of 1981-1982 was
A) an increase in energy prices. B) a collapse in investment spending. C) that it was an unfortunate byproduct of a decrease in inflation. D) a dramatic decrease in stock prices.
Monetary policy includes changes in government spending
a. True b. False Indicate whether the statement is true or false
Higher interest rates and, therefore, a decrease in investment spending are most likely to be caused by which policy mix?
A. Deficit reduction and expansionary monetary policy B. Larger deficits and contractionary monetary policy C. Larger deficits and expansionary monetary policy D. Deficit reduction and contractionary monetary policy