The Smaller the Marginal Propensity to Consume

question 19

Multiple Choice

The smaller the marginal propensity to consume,

• A) the greater of the multiplier.
• B) the lower the value of the multiplier.
• C) the greater the initial change in real GDP.
• D) the greater the initial change in aggregate expenditures.

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Definitions:

Restrictive Indorsement

An endorsement on a negotiable instrument (like a check) that limits the way the instrument can be used or further negotiated.

Indorsement Purpose

The reason or intention behind endorsing a document, such as transferring rights or specifying conditions.

Discounts

Reductions in price given to customers, often used as a sales promotion technique.

Instrument

A written legal document that defines rights, duties, entitlements, or liabilities, such as a contract, will, promissory note, or share certificate.