Which of the Following Would Tend to Make the Multiplier

question 50

Multiple Choice

Which of the following would tend to make the multiplier smaller?

• A)an increase in the marginal propensity to consume
• B)an increase in the marginal propensity to save
• C)a reduction in taxes
• D)a reduction in government spending
• E) none of the above

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Definitions:

Time

A continuum that lacks spatial dimensions and in which events occur in apparently irreversible succession from the past, through the present, into the future.

Circumstances

The conditions or facts affecting a particular event or situation, often influencing the outcome or actions of individuals.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits an individual, investor, or business misses out on.

Scarce Goods

Products or resources that are limited in availability and cannot meet all the demands of consumers.