Related to the Economics in Practiceon p. 476: According to the ...

[Tazate]

Question 1

In practice, the actual size of the multiplier is about

◦ 1.
◦ 1.4.
◦ 2.
◦ 4.

Question 2

Related to the 
Economics in Practice on p. 476: According to the "paradox of thrift," as individuals increase their saving

◦ income in the economy increases because there is more money available for firms to invest.
◦ income in the economy increases because interest rates will fall and the economy will expand.
◦ income in the economy will remain constant because the change in consumption equals the change in saving.
◦ income in the economy will fall because the decreased consumption that results from increased saving causes the economy to contract.

[lindahyatt42]

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[Tazate]

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