Dollar for dollar, the government spending multiplier
A) is larger than the investment multiplier.
B) is smaller than the investment multiplier.
C) is always identical to the investment multiplier in the simple Keynesian model.
D) can be larger or smaller than the investment multiplier depending on the marginal propensity to consume.
E) can be larger or smaller than the investment multiplier depending on the rate at which income is taxed.
Correct Answer:
Verified
Q25: The marginal propensity to consume is
A) the
Q26: If the marginal propensity to consume were
Q27: Let taxes be set equal to T
Q28: Let a small closed economy consist of
Q29: Let taxes be fixed and equal to
Q31: Macroeconomic equilibrium is stable in the simple
Q32: Let taxes be set equal to T,
Q33: Net exports are
A) negatively correlated with GDP.
B)
Q34: Consider a closed economy in which consumption
Q35: The general shape of an aggregate demand
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