How does the household savings rate affect the impact on output of an increase in government spending?

2. If the rate of savings is low, the effect of the increase will be greater than it otherwise would have been.
4. If the rate of savings is high, the effect of the increase will be greater than it otherwise would have been.
6. If the increase in government spending is high, the effect will be large.
8. It has no effect.

An increase in taxes reduces aggregate expenditures by an amount equal to

1. the change in taxes multiplied by b.
2.  
3. the change in taxes multiplied by (b/1  b).
4.  
5. the change in taxes multiplied by (1/1  b).
6.  
7. the change in taxes.

Answer rating: 100% (QA)

The detailed answer for the above question is provided be... View the full answer