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Average Propensity to Consume and Save
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Average Propensity to Consume and Save
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14. Income and Consumption / Average Propensity to Consume and Save / Problem 6
Problem 6
How might a high marginal propensity to consume affect the effectiveness of a government stimulus package?
A
It would likely decrease the effectiveness by reducing overall consumption.
B
It would likely lead to increased savings rather than consumption.
C
It would have no effect on the effectiveness of the stimulus package.
D
It would likely increase the effectiveness by boosting overall consumption.
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