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Subject - Economics:

Macroeconomics

MCQ - 71-4081

Question:

Assuming that households save a proportion of disposable income, which of the following relationships between multipliers is correct?

  1. Tax multiplier > Spending multiplier > Balanced budget multiplier
  2. Spending multiplier = Tax multiplier > Balanced budget multiplier
  3. Spending multiplier > Tax multiplier = Balanced budget multiplier
  4. Spending multiplier = Tax multiplier > Balanced budget multiplier
  5. Tax multiplier > Spending multiplier = Balanced budget multiplier

Correct Answer: D

Explanation:

For a given MPC, the spending multiplier exceeds the tax multiplier, which exceeds the balanced budget multiplier, which is always 1.

Record Performance

269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: Assuming that households save a proportion of disposable income, which of the following relationships between multipliers is correct? , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 71-4081.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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