Fiscal Policy Becomes More Powerful in Changing the Level of Output

question 2

Multiple Choice

Fiscal policy becomes more powerful in changing the level of output as

• A)investment becomes more interest elastic
• B)money demand becomes more interest inelastic
• C)money demand becomes more income elastic
• D)the marginal propensity to save gets smaller
• E)the marginal propensity to consume gets smaller

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Definitions:

Carbon Monoxide

A colorless, odorless, and poisonous gas produced by the incomplete combustion of carbon-containing materials.

Tar

A dark, thick, and sticky liquid derived from coal or wood, used for waterproofing, sealing, and paving, or as a component in certain manufacturing processes.

Single-Parent Families

Single-Parent Families are families with children that are headed by a single parent as a result of divorce, death, or other circumstances.

Divorce

The legal dissolution of a marriage by a court or other competent body.