« previous next »

Author Question: If the marginal propensity to save is 0.4, the multiplier is 2.5. Indicate whether the statement ... (Read 92 times)

Ebrown

  • Hero Member
  • *****
  • Posts: 567
on: Jun 29, 2018
If the marginal propensity to save is 0.4, the multiplier is 2.5.
 
  Indicate whether the statement is true or false

Question 2

The problem typically during a recession is not that there is too little money, but too little spending. If the problem was too little money, what would be its cause? If the problem was too little spending, what could be its cause?
 
  What will be an ideal response?


yeungji

  • Sr. Member
  • ****
  • Posts: 319
Reply #1 on: Jun 29, 2018
Answer to Question 1

TRUE

Answer to Question 2

Too little money would be caused by too small of a money supply by the Federal Reserve. Too little spending could be caused by a variety of reasons such as a decrease in consumption spending by households because they become pessimistic about the future, a decrease in investment spending by firms because they lower their estimates of the future profitability of new factories and machinery, or a decrease in U.S. exports because a major trading partner is in a recession.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Critical care patients are twice as likely to receive the wrong medication. Of these errors, 20% are life-threatening, and 42% require additional life-sustaining treatments.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

save our planet save our planet
Example of a patient statement. Example of a patient statement.
Use a rubber or padded barrier to save wear and tear on the tabletop. Use a rubber or padded barrier to save wear and tear on the tabletop.
Marginal Supply - Demand Curve Marginal Supply - Demand Curve
A Production Function with Diminishing Marginal Product of Capital A Production Function with Diminishing Marginal Product of Capital
A bank statement shows a balance of $2,970.31 The check register of the account owner shows an ... A bank statement shows a balance of $2,970.31 The check register of the account owner shows an ...
Video: Hyperglycemia Animation

For a complete list of videos, visit our video library