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