Suppose the marginal propensity to consume increases, then which of the following will be true?
THE GOVERNMENT SPENDING MULTIPLIER WILL INCREASE
THE TAX MULTIPLIER WILL INCREASE.
BOTH A AND B
THE GOVERNMENT SPENDING MULTIPLIER MAY INCREASE, BUT THE TAX MULTIPLIER WILL UNAMBIGUOUSLY DECREASE.
Which of the following statements is correct?
THE MARGINAL PROPENSITY TO CONSUME IS THE CHANGE IN CONSUMPTION EXPENDITURE DIVIDED BY THE CHANGE IN DISPOSABLE INCOME.
DISPOSABLE INCOME IS THE MAJOR DETERMINANT OF CONSUMPTION SPENDING.
BOTH A AND B.
NONE OF THE ABOVE.
Miss Wartner has one credit card with a spending limit of up to $25,000, $1,000 in travelers checks and $5,000 in a money market account. This means that Miss
Wartner's current money holdings are:
Group of answer choices
$31,000.
$25,000.
$6,000.
$1,000.
Sample Solution