Question

Assignment Score: 13.7% Resources Hint Check Answer « Question 9 of 21 Place the items about marginal propensity to consume (MPC), the multiplier, and economic stability into true and false boxes, The Keynesian cross model is another name for the aggregate expenditures model. True False Answer Bank In general, people consume more than they save. MPC + MPS = 1 Macroeconomic policy has a larger effect when the multiplier is higher. MPC 1 MPC is constant in the Keynesian cross model. A higher multiplier leads to a more stable economy. A lower multiplier leads to a more stable economy.

Answer 1

Sort the table as follows: False MPC =1 True In general people consume more than they save. MPC+MPS = 1 (As MPS = 1 - MPC) A higher multiplier leads to a more stable economy. Macroeconomic Policy has a larger effect when the multiplier is higher MPC is constant in the Keynesian cross model. MPC is constant in the Keynesian cross model. A lower multiplier leads to a more stable economy.