If the Marginal Propensity to Consume Increases, the Spending Multiplier

question 112

Multiple Choice

If the marginal propensity to consume increases, the spending multiplier _____ and the balanced budget multiplier _____.

• A) increases; increases
• B) decreases; decreases
• C) increases; remains the same
• D) decreases; remains the same

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Definitions:

Public Wrong

Acts or offenses that violate laws established to protect the public and maintain social order, dealt with through criminal justice system.

Criminal Suit

A legal action brought against an individual or organization accused of committing a crime.

Private Wrong

A legal injury or violation affecting an individual or a specific entity, as opposed to the public or society at large.

Tort Suit

A legal action enabling a person to seek damages against another for a wrongful act that caused harm or loss.