An Increase in the Marginal Propensity to Spend Out of National

question 86

Multiple Choice

An increase in the marginal propensity to spend out of national income will cause

• A)a decrease in the slope of the AE curve.
• B)a movement to the left along the AE curve.
• C)a parallel upward shift in the AE curve.
• D)a movement to the right along the AE curve.
• E)an increase in the slope of the AE curve.

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Definitions:

Family Farms

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Federal Government

The federal government is the national government of a federation, responsible for national affairs, and typically characterized by a division of powers with regional governments.

Recession

An interval of economic deceleration, involving a fall in business and industrial activities, often recognized by a drop in GDP across two sequential quarters.

Sharp Recession

A severe and rapid downturn in economic activity.