The Total Government Expenditure Multiplier Is Less Than One Because

question 28

Multiple Choice

The total government expenditure multiplier is less than one because

• A) government expenses affect labor demand.
• B) labor supply reacts to interest rate changes and consumption demand is affected by taxes.
• C) investment demand falls dramatically when the government goes into debt.
• D) the marginal propensity to consume is less than one.

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Definitions:

Neurotransmitters

Chemicals in the nervous system that transmit signals across a synapse from one neuron to another.

Recreational Drugs

Substances taken for pleasure rather than for medical reasons, often with the potential for addiction or legal issues.

GABA Neurons

GABA neurons are nerve cells that produce gamma-aminobutyric acid (GABA), a neurotransmitter that plays a key role in inhibiting or reducing neuronal excitability throughout the nervous system.

Glial Cells

Non-neuronal cells in the central nervous system that support, protect, and nourish neurons, playing a crucial role in maintaining homeostasis and forming myelin.