An Increase in the Marginal Propensity to Consume Would Cause

question 7

Multiple Choice

An increase in the marginal propensity to consume would cause the IS curve to

• A)make a parallel shift to the right.
• B)make a parallel shift to the left.
• C)rotate to become steeper from its vertical intercept.
• D)rotate to become flatter from its vertical intercept.
• E)rotate to become flatter from its horizontal intercept.

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Definitions:

Full-cost Method

A method of accounting for all expenditures associated with the exploration and development of oil and gas reserves as capitalized costs, which are then amortized over the total volume of proven resources.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.

Operating Asset

An Operating Asset is an asset used by a company in its day-to-day operations to generate revenue, such as machinery, buildings, or equipment.

Components

Parts or elements that make up a larger system or compound.