For a Marginal Propensity to Consume of 0

question 14

True/False

For a marginal propensity to consume of 0.9, the multiplier effect of an increase of $100 billion in government purchases of goods and services is smaller than the multiplier effect of a tax cut of $100 billion.

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Definitions:

Military Necessity

A legal principle in international law that justifies the use of force in armed conflict, permitting measures not forbidden by international law to secure the ends of war.

Education

The process of receiving or giving systematic instruction, especially at a school or university, fostering knowledge, skill development, and critical thinking.

Contrabands

Illicit or prohibited goods typically smuggled to avoid taxation or import/export restrictions.

Federal Government

The national government of the United States, composed of three branches: legislative, executive, and judicial, to govern the country as a whole.