In the Simple Aggregate Expenditure Model Where All Components of Aggregate

question 37

Multiple Choice

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, the size of the multiplier depends on the

• A) 45-degree line.
• B) height of the consumption function.
• C) slope of the aggregate demand curve.
• D) slope of the aggregate expenditures curve.

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Definitions:

Credits

An accounting entry that increases liabilities and equity or decreases an asset or expense account in double-entry bookkeeping.

Insurance Expense

The cost incurred by a business for insurance coverage, recognized as an expense over the policy period.

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, which are expensed over the period the insurance coverage pertains to.

Accounts Receivable

Funds that customers owe to a company for products or services provided but not yet compensated for.