Suppose Output Is Demand Determined

question 90

Multiple Choice

Suppose output is demand determined.An increase in the net tax rate ________ the marginal propensity to spend and thus ________ the simple multiplier.

• A)raises; raises
• B)raises; lowers
• C)causes no change in; raises
• D)lowers; lowers
• E)lowers; raises

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Definitions:

Social Pressure

is the influence exerted by society or a social group on an individual to conform to group norms or behaviors.

Groupthink

A psychological phenomenon that occurs within a group of people, where desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Social Psychologists

Scientists who study how individuals think, influence, and relate to one another in social contexts.

Cohesiveness

The degree to which members of a group or social unit feel bonded together and committed to each other.