Jack has an MPC of 0.82 and Jill has an MPC of 0.78.Ceteris paribus,if the government transfers income from people who behave like Jack to people who behave like Jill,
A) It is not possible to predict what will happen to aggregate demand.
B) Aggregate demand will increase.
C) Aggregate demand will remain the same.
D) Aggregate demand will decrease.
Correct Answer:
Verified
Q44: The balanced budget multiplier is equal to
A)0.
B)1.
C)1
Q45: The balanced budget multiplier says that
A)An increase
Q46: Ceteris paribus,if income was transferred from individuals
Q47: Given a $500 billion AD shortfall and
Q48: A marginal propensity to save (MPS)of 0.25
Q50: A tax cut has a smaller impact
Q51: If the government cuts taxes by $200
Q52: Assume the MPC is 0.80.If the government
Q53: If the desired fiscal stimulus is $20
Q54: If the MPC equals 0.80,a $200 billion
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