Assume there is a multiplier effect, some crowding out, and no accelerator effect. An increase in government expenditures changes aggregate demand more,
A) the smaller the MPC and the stronger the influence of income on money demand.
B) the smaller the MPC and the weaker the influence of income on money demand.
C) the larger the MPC and the stronger the influence of income on money demand.
D) the larger the MPC and the weaker the influence of income on money demand.
Correct Answer:
Verified
Q195: If a $1,000 increase in income leads
Q196: A tax cut shifts the aggregate demand
Q197: When taxes increase, interest rates
A)decrease, making the
Q198: Which of the following policies would Keynes's
Q199: If net exports fall $40 billion, the
Q201: It is likely that a constitutional amendment
Q202: An example of an automatic stabilizer is
A)unemployment
Q203: Critics of stabilization policy argue that
A)policy affects
Q204: Opponents of active stabilization policy
A)advocate a monetary
Q205: Monetary policy affects the economy with a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents