Consider a Simple Macro Model with a Constant Price Level

question 85

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The equations of the model are: C = 150 + 0.84Y,I = 400,G = 700,T = 0,X = 130,IM = 0.08Y.Equilibrium national income is

• A)1816.
• B)5750.
• C)7307.
• D)7935.
• E)17 250.

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Definitions:

Mexican War

Controversial war with Mexico for control of California and New Mexico, 1846–1848; the Treaty of Guadalupe Hidalgo fixed the border at the Rio Grande and extended the United States to the Pacific coast, annexing more than a half-million square miles of Mexican territory.

Fifty-four Forty

A historical slogan from the U.S. presidential election of 1844, expressing the goal of expanding U.S. territorial claims in the Oregon Territory up to latitude 54°40′ north.

American Control

The exercise of power or authority by the United States over certain territories, policies, or international affairs, often highlighted during periods of expansion or during international conflicts.

Oregon

A state in the Pacific Northwest region of the United States, known for its diverse landscapes ranging from forests and mountains to farmlands and cities.