In order to simplify the equation for the multiplier to its familiar,relatively simple form,we make use of the
A) assumption that increases in government purchases have no effect on consumer spending.
B) assumption that the feedback effects associated with changes in government purchases become negligible after two or three rounds of spending have occurred.
C) empirical evidence that points to a value of about for the MPC.
D) fact that the multiplier effect is represented by an infinite geometric series.
Correct Answer:
Verified
Q7: Monetary policy
A)can be implemented quickly and most
Q15: Keynes argued that aggregate demand is
A)stable,because the
Q16: Which of the following policy actions shifts
Q30: Which of the following policy alternatives would
Q45: The term crowding-out effect refers to
A)the reduction
Q54: Assuming no crowding-out,investment-accelerator,or multiplier effects,a $100 billion
Q69: An increase in the MPC
A)increases the multiplier,so
Q91: Which of the following statements is correct
Q130: Liquidity preference theory is most relevant to
Q191: Which of the following sequences best
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