In order to simplify the equation for the multiplier to its familiar, relatively simple form, we make use of the
a. assumption that increases in government purchases have no effect on consumer spending.
b. assumption that the feedback effects associated with changes in government purchases become negligible after two or three rounds of spending have occurred.
c. empirical evidence that points to a value of about 3/4 for the MPC.
d. fact that the multiplier effect is represented by an infinite geometric series.
d
You might also like to view...
An increase in demand coupled with an increase in supply results in a(n)
a. increase in price and an ambiguous effect on equilibrium quantity b. increase in equilibrium quantity and a decrease in equilibrium price c. decrease in equilibrium quantity and an ambiguous effect on equilibrium price d. increase in economic rent e. ambiguous effect on equilibrium price and an increase in equilibrium quantity
The demand for computer programmers is inseparably tied to the supply of computer software
a. True b. False Indicate whether the statement is true or false