The impact of an increase in the money supply is a(n):
a. increase in the interest rate, which in turn stimulates investment and GDP.
b. decrease in the interest rate, which in turn stimulates investment and GDP.
c. reduction in the general level of prices, which will increase the disposable income of households.
d. improvement in technology, which will stimulate both output and employment.
b
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Keynes believed that changes in autonomous spending were dominated by changes in
A) consumer expenditure. B) autonomous consumer expenditure. C) investment spending. D) taxes. E) none of the above.
An increase in the income-dependent portion of the consumption function would correspond to a
A. Movement along the consumption function to the right. B. Movement along the consumption function to the left. C. Shift of the consumption function downward. D. Shift of the consumption function upward.