The marginal propensity to consume plus the marginal propensity to save must always equal 1
a. True
b. False
Indicate whether the statement is true or false
True
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A fixed exchange rate system reduces the impact of
A) variations in the demand for real money balances on real incomes. B) the volatility of aggregate expenditures on real incomes. C) crowding out from fiscal expenditures. D) the beggar-thy-neighbor effect.
One objection to supply-side tax cuts is that demand-side changes
A. are smaller than supply-side changes. B. and supply-side changes are about equal. C. are more unpredictable than supply-side changes. D. are larger than supply-side changes.
The effects of a change in government purchases is multiplied throughout an economy...
What will be an ideal response?
Related to the Economics in Practice on p. 448: Compared to students who graduate college and obtain employment during an economic expansion, students who graduate during a recession often find that starting wages are ________ and wage growth is ________.
A. higher; slower B. lower; slower C. higher; faster D. lower; faster