If the Marginal Propensity to Save Suddenly Increases, Then

question 11

Multiple Choice

If the marginal propensity to save suddenly increases, then

• A)the size of the fiscal policy multiplier will become larger
• B) the size of the monetary policy multiplier will increase
• C)the IS-curve will become steeper
• D)the IS-curve will shift to the right and income will increase
• E)income will increase but the interest rate will decrease

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Definitions:

Ledger

A comprehensive collection of a company's accounts that records all transactions and is used to prepare financial statements.