Multiple Choice
The total government expenditure multiplier is less than one because
A) labour supply reacts to interest rate changes and consumption demand is affected by taxes.
B) investment demand falls dramatically when the government goes into debt.
C) government expenditures affect labour demand.
D) the marginal propensity to consume is greater than one.
E) the marginal propensity to consume is less than one.
Correct Answer:
Verified
Correct Answer:
Verified
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