Suppose There Is an Increase in the Marginal Propensity to Spend

question 18

Multiple Choice

Suppose there is an increase in the marginal propensity to spend out of national income. The result will be

• A)a downward parallel shift in the AE curve.
• B)an increase in the slope of the AE curve.
• C)a movement up the AE curve.
• D)a movement down the AE curve.
• E)an upward parallel shift in the AE curve.

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Definitions:

Erratic Response

Unpredictable or inconsistent reactions from a system or device, possibly indicating malfunction or poor calibration.

Manual Steering Gear

A mechanism in vehicles that allows the driver to steer by manually controlling the direction of the wheels, not assisted by hydraulic or electric systems.

Driven Gear

A gear that is driven by another.

Sector Shaft

A shaft that converts the rotational movement of the steering wheel into the lateral control required for steering the vehicle's wheels.