When There Are Few Unemployed Resources, Additional Spending Will Tend

question 70

Multiple Choice

When there are few unemployed resources, additional spending will tend to

• A) flow directly to the unemployed resources, so that the multiplier can be maintained at 1/1-mpc.
• B) increase the marginal propensity to consume, and thereby increase the size of the multiplier.
• C) increase the demand for resources and drive prices downward, increasing the size of the multiplier.
• D) bid resources away from other activities and drive prices upward, reducing the size of the multiplier.

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Definitions:

Negative

Characterized by a lack of positive attributes, or the presence of adverse or undesirable qualities.

Positive

Characterized by or displaying affirmation or acceptance; commonly used to describe a constructive or optimistic outlook.

Type A Behavior Pattern

A personality trait characterized by high levels of competitiveness, aggressiveness, impatience, and a sense of urgency, linked with an increased risk of heart disease.

Type B Behavior Pattern

A personality type characterized by less competitive, more relaxed, and less stress-prone behaviors than Type A.