Let AE = Aggregate Expenditures, C = Consumption, I_P =

question 39

Multiple Choice

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, JG =Government Purchases. Consider a simple aggregate expenditures model, where
JAE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is

• A) 1.33
• B) 2.5
• C) 5
• D) 15

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Definitions:

Start-Up Process

The sequence of steps that an entrepreneur takes to establish a new business, including idea generation, market research, business model development, and securing funding.

Entrepreneurship

The process of identifying opportunities for which marketable needs exist and assuming the risk of creating an organization to satisfy them.

Customer Base

Refers to the group of customers who repeatedly purchase the goods or services of a business.

Environmental Forces

External factors that influence a business's operations and decision-making, including economic, political, regulatory, technological, and social factors.