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If the current level of income (Y0) is less than the full-employment level of income (YF) in a goods market model of a closed economy

If the current level of income (Y0) is less than the full-employment level of income (YF) in a goods market model of a closed economy ...

a. an increase in investment spending will move the economy closer to full employment.

b. an increase in the marginal propensity to consume will move the economy closer to full employment.

c. an increase in government spending will move the economy closer to full employment.

d. an increase in taxes will move the economy closer to full employment.

e. an increase in any of the components of autonomous spending will move the economy closer to full employment.

32

1. Only a, b and c

2. Only b, c and d

3. Only a, c and d

4. Only b, d and e

5. Only a and c

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