Consider a Simple Macro-Model with Demand-Determined Output

question 14

Multiple Choice

Consider a simple macro-model with demand-determined output.An exogenous increase in the domestic price level will ________ the real value of the private sector's wealth,which leads to ________ in autonomous consumption and thus ________ shift in the AE function.

• A)increase; a decrease; a downward
• B)increase; an increase; a downward
• C)increase; an increase; an upward
• D)reduce; a decrease; a downward
• E)reduce; an increase; an upward

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Definitions:

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