Multiple Choice
A decrease in government purchases will have a smaller effect on aggregate demand:
A) the larger the marginal propensity to consume.
B) the larger the average propensity to consume.
C) the larger the marginal propensity to save.
D) the larger the average propensity to save.
E) the smaller the marginal rate of taxation.
Correct Answer:
Verified
Correct Answer:
Verified
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Q22: If the marginal propensity to consume is
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