Consider a Macro Model in Which Output Is Assumed to Be

question 127

Multiple Choice

Consider a macro model in which output is assumed to be demand-determined.One situation which may justify this assumption is when

• A)net exports are positive.
• B)net exports are negative.
• C)the marginal propensity to consume out of disposable income is equal to the marginal propensity to spend out of national income.
• D)all resources in the economy are fully employed.
• E)the economy is operating with some unemployed resources.

---

Definitions:

Restrictive Financial Policy

Policies implemented by firms to control their financial risk, often including tight controls over credit terms and dividend payments.

Premium Prices

Premium prices are higher than average prices charged for products or services, often because of perceived superiority in quality or branding.

Accounts Receivable Financing

A secured short-term loan that involves either the assignment or factoring of receivables.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount for immediate cash.