Consider a Simple Macro Model with Demand-Determined Output

question 84

Multiple Choice

Consider a simple macro model with demand-determined output.Suppose the level of exports decreases unexpectedly by $6 billion.If the government wants to restore the initial equilibrium level of output it could,all other things equal,

• A)increase its purchases by more than $6 billion.
• B)increase its net tax revenues by $6 billion.
• C)increase its net tax revenues by less than $6 billion.
• D)increase its purchases by $6 billion.
• E)decrease its purchases by $6 billion.

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of multiple investments.

Move Time

The duration it takes to transfer materials or products from one phase of production to another.

Non-value-added Time

Time spent during the production process that does not directly contribute to the final value or quality of the product.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit from the investment by its cost.