Multiple Choice
Which of the following is not an assumption of the simple multiplier formula?
A) The economy has excess capacity and room to expand output.
B) Firms will raise prices as buyers buy more of their output.
C) People will spend more if they earn additional income.
D) Business firms will increase production if demand for their output increases.
Correct Answer:
Verified
Correct Answer:
Verified
Q45: The multiplier will be larger, the steeper
Q46: The Great Recession of 2007-2009 altered the
Q48: Generally speaking, the greater the MPS, the<br>A)smaller
Q51: The saving schedule would be shifted upward
Q52: If people saved more of any extra
Q54: A lower real interest rate typically induces
Q55: The MPC can be defined as that
Q157: The purchase of capital goods, like _
Q179: The fraction, or percentage, of total income
Q193: With an MPS of 0.3, the MPC