The total government expenditure multiplier is less than one because
A) labour supply reacts to interest rate changes and consumption demand is affected by taxes.
B) investment demand falls dramatically when the government goes into debt.
C) government expenditures affect labour demand.
D) the marginal propensity to consume is greater than one.
E) the marginal propensity to consume is less than one.
Correct Answer:
Verified
Q38: An asymmetric information problem arises when
A) interest
Q39: When drawn against the real interest rate,
Q40: The marginal benefit from investment for a
Q41: When drawn against the real interest rate,
Q42: The decrease in lifetime wealth affects consumption
Q44: When drawn against the real interest rate,
Q45: The total government expenditure multiplier
A) is the
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Q47: The output demand curve shows the
A) positive
Q48: An increase in total factor productivity causes
A)
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