Consider the Simplest Macro Model with Demand-Determined Output

question 38

Multiple Choice

Consider the simplest macro model with demand-determined output.The equations are: C = 150 + 0.8Yd,Yd = Y -T,I = 400,G = 700,T = .2Y,X = 130,and IM = 0.14Y.The marginal propensity to spend on national income in this model is

• A)0.50.
• B)0.54.
• C)0.64.
• D)0.84.
• E)0.86.

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