Answer to Question #103311 in Macroeconomics for December

Question

A. Which of the following is likely to shift the consumption schedule downwards?

1. Expectations of a fall in interest rates
2. Consumer prices are expected to fall
3. Currently less stock of durable goods in the possession of consumers
4. The expectation of a future rise in the consumer price index

B. Which of the following statement is correct about the introduction of taxation in the Keynesian model?

1. It increases the value of the multiplier
2. It shift the aggregate expenditure curve upwards
3. It increases net exports
4. It swivels the aggregate expenditure curve downwards

Answer 1

A-4

B-2