If the MPC Decreases,then

question 45

Multiple Choice

If the MPC decreases,then

• A)the MPS decreases.
• B)the multiplier decreases.
• C)the multiplier increases.
• D)MPC + MPS is less than 1.

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Definitions:

Supply-Side Economics

An economic theory that advocates reducing taxes and regulations to stimulate production and economic growth.

Lower Taxes

A reduction in the amount of taxes imposed by a government, which can encourage economic growth by increasing consumers' and businesses' disposable income.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to sell at a given price level during a specific time period.

Macroeconomic Instability

A condition characterized by large and unpredictable fluctuations in key economic indicators such as GDP, inflation, and unemployment rates.