According to Baumol and Blinder, the Real-World Multiplier Will Be

question 185

Multiple Choice

According to Baumol and Blinder, the real-world multiplier will be smaller than 1/(1 − MPC) because the 1/(1 − MPC) measure is based on

• A)a model that ignores inflation associated with the expansion of income.
• B)a model that adds taxes that tend to change as income changes.
• C)a model that adds the effects of international trade.
• D)a model that ignores the prices government faces

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Definitions:

Good Faith

Conducting oneself with honesty and sincerity without intending to defraud or deceive others.

Preprinted Promissory Note

A standardized, fill-in-the-blank form that evidences a promise to pay a specified amount of money to a named party under agreed terms.

Payable

Refers to amounts of money that a business or individual owes to another party and is required to pay, typically within a specified period.

Forge

To create a fake version of something, such as a document or signature, with the intent to deceive.