Tackle the Test: Multiple-Choice Questions
1. The marginal propensity to consume
I. has a negative relationship to the spending
multiplier.
II. is equal to 1.
III. represents the proportion of consumers' dispos-
able income that is spent.
a. I only
b. II only
c. III only
d. I and III only
e. I, II, and III
2. Assume that taxes and interest rates remain unchanged