If the MPC Increases from 0

question 275

Multiple Choice

If the MPC increases from 0.75 to 0.80 and there are no income taxes or imports

• A) the multiplier becomes larger.
• B) the multiplier becomes smaller.
• C) the slope of the consumption function becomes smaller.
• D) the slope of the savings function becomes larger.

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Definitions:

Self-perpetuating

A process or activity that generates the conditions necessary for its continuation or growth without external input.

Jet Lag

A temporary sleep disorder that occurs when a person's internal body clock is out of sync with the time in a new time zone, often experienced after long flights.

East

A cardinal direction; the direction from which the sun rises, opposite of west.

West

A cardinal direction, opposite of east, often associated with sunset or the direction on the left when facing north.