In the Simple Keynesian Model, If Desired Investment Is Greater

question 226

Multiple Choice

In the simple Keynesian model, if desired investment is greater than desired saving:

• A) the multiplier effect will move the economy to a lower income level.
• B) income and output will rise.
• C) interest rates will fall.
• D) actual savings will fall as the economy moves to a lower output level.

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Definitions:

Door-In-The-Face Technique

A persuasion strategy whereby a large, likely-to-be-rejected request is made first with the goal of making a smaller request seem more reasonable by comparison.

Foot-In-The-Door Technique

A persuasion strategy where a person is led to agree to a small request first, making them more likely to comply with a larger request later.

Response Cue

A signal or stimulus that indicates how to react or what action to take next in a given situation.

Compliance

The act of conforming to, following, or adhering to rules, standards, or laws, or in medicine, the degree to which a patient correctly follows medical advice.