Consider a Simple Macro Model with a Constant Price Level

question 61

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.Desired consumption expenditure at equilibrium national income is

• A)1675.44.
• B)4060.04.
• C)4830.00.
• D)4980.00.
• E)6815.40.

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Definitions:

Highest Valued Alternative

The next best choice or option that must be forgone to pursue a certain action or investment, often considered in opportunity cost calculations.

Opportunity Cost

The worth of the best option not chosen due to a decision being made.

Concert Costs

Expenses associated with organizing, promoting, and hosting a live music performance.

Resell

The act of selling a purchased good or service to another party, often for a price higher than the original purchase price.