If the MPC is 3/4 then the multiplier is
A) 4, so a $100 increase in government spending increases aggregate demand by $400.
B) 4, so a $100 increase in government spending increases output by $400.
C) 4/3, so a $100 increase in government spending increases aggregate demand by $400/3.
D) 4/3, so a $100 increase in government spending increases output by $400/3.
Correct Answer:
Verified
Q67: The multiplier effect
A)and the crowding-out effect both
Q69: An increase in the MPC
A)increases the multiplier,so
Q243: Assume the MPC is 0.625. Assuming only
Q245: If taxes
A)increase, then consumption increases, and aggregate
Q246: Scenario 21-2. The following facts apply to
Q247: Assume the MPC is 0.75. Assuming only
Q249: Assume the multiplier is 5 and that
Q250: An increase in government purchases is likely
Q251: Suppose that the MPC is 0.60; there
Q253: Scenario 21-2. The following facts apply to
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents