Multiple Choice
An increase in the MPC
A) increases the multiplier,so that changes in government expenditures have a larger effect on aggregate demand.
B) increases the multiplier,so that changes in government expenditures have a smaller effect on aggregate demand.
C) decreases the multiplier,so that changes in government expenditures have a larger effect on aggregate demand.
D) decreases the multiplier,so that changes in government expenditures have a smaller effect on aggregate demand.
Correct Answer:
Verified
Correct Answer:
Verified
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