Multiple Choice
In 2009 President Obama and Congress increased government spending.Some economists thought this increase would have little effect on output.Which of the following would make the effect of an increase in government expenditures on aggregate demand smaller?
A) the MPC is small and changes in the interest rate have a small effect on investment
B) the MPC is small and changes in the interest rate have a large effect on investment
C) the MPC is large and changes in the interest rate have a small effect on investment
D) the MPC is large and changes in the interest rate have a large effect on investment
Correct Answer:
Verified
Correct Answer:
Verified
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