Consider the Simple Macro with Demand-Determined Output

question 92

Multiple Choice

Consider the simple macro with demand-determined output.If the marginal propensity to consume out of disposable income (MPC) is equal to the marginal propensity to spend out of national income (z) ,then

• A)the marginal propensity to import (m)is larger than the tax rate (t).
• B)the marginal propensity to import (m)is smaller than the tax rate (t).
• C)the simple multiplier is smaller in a closed economy with no government.
• D)the simple multiplier is larger in a closed economy with no government.
• E)there is no effect on the simple multiplier from imports or tax rates.

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Definitions:

Sigmund Freud

An Austrian neurologist best known for developing the theories and techniques of psychoanalysis.

Applied Psychology

This refers to the use of psychological methods and findings of scientific psychology to solve practical problems of human and animal behavior and experience.

Behaviourism

A field of psychology that focuses on observing and analyzing how behavior is learned and influenced by the environment, without invoking thoughts or feelings.

Functionalism

A theory in sociology and psychology which emphasizes the importance of understanding the purpose or function of behavior, institutions, and processes in society and the mind.