Business, 18.01.2021 01:00 cecelia090

Consider two economies that are identical, with the exception that one has a high marginal propensity to consume (MPC) and one has a low MPC. If the money supply is increased by the same amount in each economy, the high MPC economy will experience: Select one:
a. a smaller increase in output and a
smaller decrease in the interest rate.
b. A larger increase in output and a
smaller decrease in the interest rate.
c. a larger increase in output and a
larger decrease in the interest rate.
d. A smaller increase in output and a larger decrease in the interest rate

= A larger increase in output and a
smaller decrease in the interest rate.

Answers: 2

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Consider two economies that are identical, with the exception that one has a high marginal propensit...

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