Government involvement in a market may generate more inefficiency than it cures.

In an open economy, the government purchases multiplier will be smaller the

A) larger the marginal propensity to consume. B) smaller the marginal propensity to import. C) larger the tax rate. D) All of the above are correct.

Panel (a) in Figure 6.1 depicts

a. low interest elasticity of money demand. b. high interest elasticity of money demand. c. no interest elasticity of money demand, which is the same as Panel (b). d. None of the above