A given change in disposable income would have the smallest ...

[crazycityslicker]

A given change in disposable income would have the smallest effect on aggregate demand with which of the following marginal propensities to consume?
 a. 0.4
  b. 0.6
  c. 0.8
  d. 0.2

Question 2

An increase in deficit spending tends to raise interest rates, thereby resulting in a multiplier effect that is higher than what would be associated with an equivalent increase in consumption spending.
 a. True
  b. False
  Indicate whether the statement is true or false

[iceage]

Answer to Question 1

d

Answer to Question 2

False

[crazycityslicker]

Correct answers!

[iceage]

Great! Please up vote