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AP® Macroeconomics

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Moderate

Consumer Spending Effects

APMACR-LKTDGE

If consumer spending dropped significantly, but income held steady, then which of the following is most likely to occur?

A

Frictional unemployment will increase.

B

Cyclical unemployment will increase.

C

Structural unemployment will increase.

D

Marginal propensity to consume is increasing.

E

Marginal propensity to save is falling.