Question 1 9 pts Because of the paradox of thrift: The reduction in government spending during the Great Depression led to more job creation and a reduction in unemployment. The increase in aggregate saving during the Great Depression led to a decrease in aggregate income. The banking crisis during the Great Depression led to an increase in consumption smoothing. The reduction in government spending during the Great Depression led to a more efficient form of capitalism. Question 5 9 pts In an economy where the marginal propensity to consume is 0.6, what will the multiplier be if we ignore taxes and imports? 2.5 0.4 1.67 4.0 Question 6 9 pts Debt owed by the government is different from the debt owed by an individual because: The U.S. government can roll over its debt by borrowing new money to pay off old debts. The U.S. government is less likely to pay back its lenders. The U.S. government has the legal authority to cancel the debt that it owes to lenders. The U.S. government typically pays a higher rate of interest on its debt