Multiple Choice
A decrease in the propensity to consume from 0.89 to 0.64 will cause:
A) the ZZ line to become flatter and a given change in autonomous spending (c0) to have a larger effect on output.
B) the ZZ line to become flatter and a given change in autonomous spending (c0) to have a smaller effect on output.
C) the ZZ line to become steeper and a given change in autonomous spending (c0) to have a larger effect on output.
D) the ZZ line to become flatter and a given change in autonomous spending (c0) to have no effect on output.
E) the ZZ line to become steeper and a given change in autonomous spending (c0) to have a smaller effect on output.
Correct Answer:
Verified
Correct Answer:
Verified
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