Multiple Choice
If the marginal propensity to consume increases, the spending multiplier _____ and the balanced budget multiplier _____.
A) decreases; remains the same
B) increases; remains the same
C) increases; increases
D) decreases; decreases
Correct Answer:

Verified
Correct Answer:
Verified
Q48: Tax changes generally have less of an
Q69: A criticism of Keynesian policies is that
Q102: According to the balanced budget multiplier, an
Q103: Between 1929 and 1933, government spending _
Q104: Increases in taxes result in increased consumption
Q105: (Table: Keynesian Equilibrium Analysis with Taxes and
Q106: (Figure: Simple Keynesian Model) In the figure
Q109: If the marginal propensity to consume is
Q133: The rate of return on investment is
Q232: Keynes believed that the economy is self-correcting.