The Smaller the Mpc, the ________ the Income-Expenditure Multiplier and the ________

question 100

Multiple Choice

The smaller the mpc, the ________ the income-expenditure multiplier and the ________ the effect of a change in autonomous spending on short-run equilibrium output.

• A)larger; larger
• B)larger; smaller
• C)smaller; smaller
• D)smaller; larger

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Definitions:

Guaranteed Residual Value

The predetermined value of a leased asset at the end of the lease term, which the lessee may have to pay or receive depending on the lease agreement.

Implicit Interest Rate

The interest rate embedded in a lease or loan agreement, discernible through the payment terms but not explicitly stated.

Lease Receivable

The amount of money owed to a lessor under the terms of a lease agreement for the use of an asset.

Direct Financing Lease

A type of lease where the lessor purchases an asset and leases it out, effectively financing its purchase for the lessee, recognizing interest income over the lease term.