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:

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Electrical devices that transfer electrical energy between two or more circuits through electromagnetic induction, often used to increase or decrease voltage levels.

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The production and discharge of something, especially gas or radiation, into the environment.