Multiple Choice
Which of the following is true of the simple spending multiplier
A) It equals the ratio of the marginal propensity to consume to the marginal propensity to save.
B) It equals the difference between the marginal propensity to save and the marginal propensity to consume.
C) It is the reciprocal of the marginal propensity to save.
D) It is the reciprocal of the marginal propensity to consume.
E) It is the sum of the marginal propensity to consume and the marginal propensity to save.
Correct Answer:
Verified
Correct Answer:
Verified
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