QUESTION 8 Which of these is positively related to the size of the multiplier? O a. The marginal propensity to consume O b. The marginal utility of money Oc. The marginal tax propensity Od. The marginal propensity to save
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- 1. What would happen to multiplier if investment were to be positively related to income? 2. is it possible for total saving to fall when people beome more thirfty? 3. What is meant by multiplier?Why shoul the value of multiplier rise when people spend more on consumption?An increase in the value of the simple multiplier can be caused by... O a. An increase in the net tax rate. O b. A decrease in the net tax rate. O c. An increase in the marginal propensity to save. O d. A decrease in the marginal propensity to consume. O e. An increase in the marginal propensity to import. Clear my choiceWhen government spending increases by $1, planned expenditures increase by $1 O A. times the spending multiplier and the equilibrium level of income will increase by $1. O B. and the equilibrium level of income will increase by $1. O C. and the equilibrium level of income will increase by $1 times the spending multiplier. O D. and the equilibrium level of income will increase by less than $1. When taxes are cut by $1, planned expenditures O A. decrease by $1 and the equilibrium level of income will decrease by $1 times the tax multiplier. O B. increase by less than $1 and the equilibrium level of income will increase by $1 times the tax multiplier. OC. increase by $1 and the equilibrium level of income will increase by S1 times the tax multiplier. O D. increase by $1 and the equilibrium level of income will increase by $1 times the spending multiplier. Click to select your answer! V560
- Say, the expenditure multiplier for an economy is 2. An increase in government spending by $300 million will provide a .... million boost to the economy. Select one: O a. $150 million. O b. $300 million O c. $600 million O d. $200 million.The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveThe transfer payment multiplier is smaller than the expenditure multiplier by the: O a. Transfer payment O b. Aggregate demand O c. Marginal propensity to consume O d. Marginal propensity to save
- Which best describes why the multiplier exists? When people spend money, that money ends up in the pockets or bank accounts of other people or organizations, who then use that money in some way. O The multiplier exists because money spent today is always more valuable than money spent in the future, due to inflation and interest rates. When people see the government spending more money, they realize that the government thinks that prices are low; thus, they believe it is a good time to buy things. When people see other people spending money, they know that the economy is about to improve, leading them to spend more money.Suppose a given hypothetical economy has the following values. GDP-520 Billion, Consumption =$13 Billion; Govermment Purchase-$4 Billion; and Budget Surplus = $1 Billion How much is the public saving? OA S5 Bilion OB $4 Blion OC.52 Billion OD-$1 Billion OE S1 Billion OF $3 BillionWhat is the formula for the marginal propensity to expend? A aggregate expenditures/A national income O b. A autonomous expenditures/A national income O a. O c. A consumption/A national income O d. A national income/A induced expenditures
- QUESTION 47 An increase in the marginal propensity to consume (MPC) O a. increases the multiplier, so that changes in government spending have a larger effect on aggregate expenditure (aggregate demand). O b.increases the multiplier, so that changes in government spending have smaller effect on aggregate expenditure (aggregate demand). O c. decreases the multiplier, so that changes in government spending have a larger effect on aggregate expenditure (aggregate demand). O d. decreases the multiplier, so that changes in government spending have a smaller effect on aggregate expenditure (aggregate demand).The closed economy of Sokovia has a GDP of 150 billion dollars and a marginal propensity to save of 02. In the closed economy of Madripoor the GDP is 160 billion dollars and the marginal propensity to save is 0 25 We can infer that 6. Select one answer: O It takes Sokovia an injection of 10 billion dollars to reach a GDP of 200 billion dollars O The multiplier in Madripoor is 6. O The multiplier in Sokovia is 4. O It takes Madripoor an injection of 12 billion dollars to reach a GDP of 200 billion dollars.QUESTION 10 If the multiplier is 5 what would be the change in consumption if income rises by 50? O a.40 O b. 90 O c. 250 O d. 10
