Quiz #651

• 1. MMT recognises that increasing the amount of money in the economy will reduce its value.
• False
• True
• Maybe
• 2. If national government public works expenditure funds the construction of a new road but then digs it up and rebuilds, the expenditure in the rebuild would not count towards national income.
• False
• True
• 3. The marginal propensity to consume (MPC) is the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.
• False
• True

Quiz #651 answers

• 1. MMT recognises that increasing the amount of money in the economy will reduce its value.

Answer: Maybe

• 2. If national government public works expenditure funds the construction of a new road but then digs it up and rebuilds, the expenditure in the rebuild would not count towards national income.

Answer: False

• 3. The marginal propensity to consume (MPC) is the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.

Answer: False