FIGURE 22-4
-Refer to Figure 22-4. The rotation from AE0 to AE1 implies that the marginal propensity to spend and the value of the simple multiplier .
A) increases; decreases
B) increases; increases
C) remains the same; increases
D) decreases; increases
E) decreases, decreases

Question

FIGURE 22-4
-Refer to Figure 22-4. The rotation from AE0 to AE1 implies that the marginal propensity to spend and the value of the simple multiplier .
A) increases; decreases 
B) increases; increases 
C) remains the same; increases 
D) decreases; increases 
E) decreases, decreases

Quizplus · Accepted Answer

The rotation from AE0 to AE1 suggests an increase in the marginal propensity to spend, which in turn increases the value of the simple multiplier.

FIGURE 22-4 -Refer to Figure 22-4. the Rotation from AE0 to AE1