Consider the AD Curve in the Simple Macro Model

question 120

Multiple Choice

Consider the AD curve in the simple macro model.When there is a change in autonomous desired expenditure,the simple multiplier is equal to the

• A)product of the horizontal shift of the AD curve times the change in autonomous expenditure.
• B)product of the vertical movement along the AD curve times the change in autonomous expenditure.
• C)ratio of the horizontal shift of the AD curve to the change in autonomous expenditure.
• D)ratio of the vertical movement along the AD curve to the change in autonomous expenditure.
• E)ratio of the vertical shift of the AD curve to the change in autonomous expenditure.

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Definitions:

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at a given price, often leading to price reductions.

Demand Schedules

Tabular representations showing the quantity of a good or service that consumers are willing and able to purchase at various prices within a specified period.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where supply and demand curves intersect.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price; often leads to price reductions.