Unformatted text preview: ing. a E) n increase in the desire to invest. a 25) tax cut will cause: A A) reduction in investment. a B) o change in autonomous spending. n D) o change in investment. n C) n increase in investment. a 26) uppose business confidence increases causing an increase in investment. Based on our S understanding of the model presented in Chapter 3, we know with certainty that an increase in investment will cause: A) n increase in the multiplier. a 21) ______ 22) ______ 23) ______ 24) ______ 25) ______ 26) ______ B) reduction in the marginal propensity to save. a C) reduction in the multiplier. a D) n increase in output. a E) oth A and D b 27) hich of the following events will cause a reduction in equilibrium output? W A) reduction in the marginal propensity to consume a a B) n increase in the marginal propensity to save C) n increase in taxes a D) ll of the above a E) one of the above n 28) uppose business confidence decreases causing a reduction in investment. Based on our S understanding of the model presented in Chapter 3, we know with certainty...
View Full Document
- Spring '08
- marginal propensity, autonomous consumption, ZZ line