Question :
271.Some economists argue that when a government tries too hard : 2032675
271.Some economists argue that when a government tries too hard to stabilize the economy through fiscal or monetary policy, it can end up making the economy less stable.
A)True
B)False
272.The size of the multiplier increases as the size of the marginal propensity to consume increases.
A)True
B)False
273.The marginal propensity to consume is the percentage of a household's income that is used to pay income tax.
A)True
B)False
274.If the marginal propensity to consume is 0.80, the multiplier for government purchases of goods and services will be 1.25.
A)True
B)False
275.If the marginal propensity to consume is 0.8 and government purchases of goods and services decrease by $30 billion, real GDP will decrease by $24 billion.
A)True
B)False
276.An increase in government spending for goods and services is an autonomous increase in aggregate demand.
A)True
B)False
277.If policy makers want to increase real GDP by $100 billion and the marginal propensity to consume is 0.75, they should increase government purchases of goods and services by $75 billion.
A)True
B)False
278.If policy makers want to decrease real GDP by $100 billion and the marginal propensity to consume is 0.6, they should decrease government purchases of goods and services by $40 billion.
A)True
B)False
279.A change in government transfers shifts the aggregate demand curve by more than a change in government spending for goods and services and has a larger effect on real GDP.
A)True
B)False
280.A change in taxes shifts the aggregate demand curve by less than a change in government spending for goods and services and has a smaller effect on real GDP.
A)True
B)False
