The size of the expenditure multiplier is influenced by
i. the marginal propensity to consume.
ii. autonomous spending.
iii. the marginal tax rate.
A) i only B) ii only C) iii only D) i and iii E) ii and iii
D
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In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity
Indicate whether the statement is true or false
To deter a potential entrant, an existing firm in a market may threaten to sharply increase production so that the entrant will be left with a small share of the market
The firm can make this threat credible by limiting its own options, and possible actions of this type include: A) signing long-term sales contracts that commit the firm to high levels of output. B) building a very large factory that could potentially produce enough output to meet most of the market demand. C) signing long-term purchase contracts for large amounts of production inputs. D) all of the above