Multiple Choice
According to Baumol and Blinder, the real-world multiplier will be smaller than 1/(1 − MPC) because the 1/(1 − MPC) measure is based on
A) a model that ignores inflation associated with the expansion of income.
B) a model that adds taxes that tend to change as income changes.
C) a model that adds the effects of international trade.
D) a model that ignores the prices government faces
Correct Answer:
Verified
Correct Answer:
Verified
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