Assume There Is a Multiplier Effect, Some Crowding Out, and No

question 122

Multiple Choice

Assume there is a multiplier effect, some crowding out, and no accelerator effect. An increase in government expenditures changes aggregate demand more,

• A)the smaller the MPC and the stronger the influence of income on money demand.
• B)the smaller the MPC and the weaker the influence of income on money demand.
• C)the larger the MPC and the stronger the influence of income on money demand.
• D)the larger the MPC and the weaker the influence of income on money demand.

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Definitions:

Warranty Liability

The legal obligation of a seller to provide compensation for faults in goods or property that were sold under warranty.

Primarily Liable

The direct obligation of an entity or individual to pay a debt or fulfill a contractual commitment without depending on another's performance of duty.

Secondarily Liable

A condition wherein an individual or entity is obligated to fulfill a duty or payment if the primarily liable party fails to do so.

Primary Liability

The main or first layer of responsibility for fulfilling a financial or legal obligation.