The Keynesian model is based on the idea that
A) both consumption and saving are directly related to disposable income.
B) saving depends only on the interest rate.
C) consumption is unrelated to the level of real Gross Domestic Product (GDP).
D) both consumption and saving are unrelated to the level of real Gross Domestic Product (GDP).
A
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According to this Application, studies estimated that a decrease of consumer wealth of $1 would ________ consumption spending by somewhere between ________
A) lower; $0.21 and $0.72 B) raise; $0.10 and $0.50 C) raise; $0.21 and $0.72 D) lower; $0.02 and $0.07
The money multiplier is the
A) fraction of the monetary base that is kept in currency. B) number of times that the Fed conducts open market operations in a month. C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money. D) factor by which a change in the deposits base is multiplied to give the change in the monetary base. E) proportion by which a change in the quantity of money changes the monetary base.