The marginal propensity to consume is equal to the slope of the consumption function

The neoclassical theory of investment

A) links investment spending to stock prices. B) emphasizes that current investment spending depends positively on the expected future growth of GDP. C) emphasizes the role of real interest rates and taxes as determinants of investment. D) suggests that a downturn in real GDP will lead to a sharp fall in investment, which leads to further reductions in GDP through the multiplier.

The structural surplus

A) is legally required to be positive. B) fluctuates over the business cycle. C) is, by definition, equal to the negative of the cyclical deficit. D) equals the actual surplus plus the cyclical surplus. E) is the government budget surplus that would exist if the economy was at full employment.