Macroeconomics Question No.5 State whether the following statements are true, false or uncertain. Also provide the explanation of false statements: The higher the level of income, higher will be the marginal propensity to consume. If marginal propensity to consume increases, aggregate demand curve will become flatter. The value of marginal propensity to consume must lies between 0 and 1. There is a direct relationship between interest rate and money supply. Government will use expansionary fiscal policy to control inflation.

Macroeconomics Question No.5 State whether the following statements are true, false or uncertain. Also provide the explanation of false statements: The higher the level of income, higher will be the marginal propensity to consume. If marginal propensity to consume increases, aggregate demand curve will become flatter. The value of marginal propensity to consume must lies between 0 and 1. There is a direct relationship between interest rate and money supply. Government will use expansionary fiscal policy to control inflation.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 1TY

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