The ________ the marginal propensity to import, the ________ the expenditure multiplier.
A.
larger; smaller
B.
smaller; smaller
C.
larger; more negative
D.
larger; larger
E.
None of the above is correct, because the expenditure multiplier is not related to the marginal propensity to import.
Correct option is (A).
Spending multiplier = 1 / (MPS + MPM) where MPS: Marginal propensity to save, MPM: Marginal propensity to import
The larger the MPM, the larger the value of (MPS + MPM) and so, the smaller the multiplier.
The ________ the marginal propensity to import, the ________ the expenditure multiplier. A. larger; smaller B....
-Summer 2018/2019 multiplier b. A higher marginal tax rate and a higher marginal propensity to import both decrease the size of the multiplier d. A higher marginal tax rate decreases the size of the multipller while a lower marginal propensity to import decreases the size of the
25. Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent of GDP. The spending multiplier for this economy is equal to _____. a. 0.54 b. 0.80 c. 1.25 d. 1.41 e. 1.85
Q. How do the marginal propensity to consume, the marginal propensity to import and the income tax ratio influence the multiplier? How do fluctuation in autonomous expenditure influence real GDP?
. The marginal propensity to consume in a city is 0.7 and the marginal propensity to import is 0.1. A team proposes a new stadium construction project that will generate $6 million in spending. A. Using multiplier effects, how much will the project generate in total? B. Why is it likely that the actual increase in new income will be much smaller?
An increase in the marginal propensity to consume Select one: a increases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand. b. decreases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand. C. increases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand. d. decreases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand. If many...
If the marginal propensity to consume (MPC) in your classmate's nation is 3/5 and the marginal propensity to save (MPS) in your country is 1/10, which of the following must be true? a. Autonomous consumption is lower in your classmate's nation than in your country. b. Autonomous consumption is higher in your classmate's nation than in your country. c. The spending multiplier is smaller in your classmate's nation than in your country. d. Total consumption is lower in your classmate's...
The multiplier is equal to Multiple Choice Ο 1- Marginal propensity to save Ο Marginal propensity to save + Marginal propenstyto consume Ο C) 1. Marginal propensity to save. Ο C) 1 - Marginal propensity to consume.
If the marginal propensity to consume (MPC) increases... A. The MPS increases B. The multiplier decreases C. MPC +MPS is less than 1 D. THe multiplier increases
Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In the above table, what is the value of the marginal propensity to consume MPC) that correctly fills in blank (G) and the value of the income multiplier that correctly fills in blank (H)? Page 9 b)When the MPC increases, the income/spending multiplier (increases or decreas es). If MPC decreases? 17)Draw an AD and SRAS graph and label the axis, lines and...
ue or false. MPC+ MPS 1 o True O False Correct. Marginal propensity to consume plus marginal propensity to save equals 1. of aggregate expenditure is 5 MPcio 8 when the MPC is.8 and there is an increase in investment spending of $100,000. x Incorrect. First determine the expenditure multiplier, then multiply that by $100,000 to obtain the correct answer True or false. If people save more of their income, the expenditure multiplier will not decrease and aggregate expenditures will...