Which of the Following Events Will Cause a Reduction in Equilibrium

question 21

Multiple Choice

Which of the following events will cause a reduction in equilibrium output?

• A)an increase in the marginal propensity to save
• B)an increase in taxes
• C)a reduction in the marginal propensity to consume
• D)all of the above
• E) none of the above

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Definitions:

Financial Intermediaries

Institutions that facilitate the flow of funds between savers and borrowers, thereby making investment more accessible.

Stockbrokers

Licensed professionals who buy and sell securities on behalf of clients, typically charging commissions for their services.

Direct Transfers

The process of moving assets or capital directly between parties without the use of an intermediary.

Maturities

The dates on which the principal or face value of a debt instrument becomes due and is to be paid to investors.