A Decrease in Government Purchases Will Have a Smaller Effect

question 18

Multiple Choice

A decrease in government purchases will have a smaller effect on aggregate demand:

• A)the larger the marginal propensity to consume.
• B)the larger the average propensity to consume.
• C)the larger the marginal propensity to save.
• D)the larger the average propensity to save.
• E)the smaller the marginal rate of taxation.

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Definitions:

Streamlining Operations

Refers to the process of making a business's operations more efficient and effective by improving workflows and removing unnecessary steps or overhead.

Fewer Layers

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Rapidly Changing Consumer Demands

The swift alteration in consumers’ preferences and needs that businesses must adapt to in order to stay competitive.

Storytelling

The act of telling or writing narratives or stories, often used as a powerful means of communication, teaching, and entertainment.