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:

Upward Sloping

Describes a line or curve on a graph that moves higher as it goes from left to right, indicating a positive relationship between two variables.

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded.

Legal Services

Professional services provided by lawyers or attorneys to help individuals, businesses, or organizations with legal issues.

Pollution Tax

A levy imposed on the emission or discharge of pollutants, intended to internalize the externality costs of pollution.