Consider a Simple Macro Model with Government and Demand-Determined Output

question 37

Multiple Choice

Consider a simple macro model with government and demand-determined output.If the government wants to reduce equilibrium national income by $20 billion,G must be

• A)raised by $20 billion times the simple multiplier.
• B)raised by $20 billion divided by the simple multiplier.
• C)lowered by $20 billion times the simple multiplier.
• D)lowered by $20 billion divided by the simple multiplier.
• E)lowered by $20 billion.

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Definitions:

Demographic Transition

A model describing how the birth and death rates in a population change from high to low levels as a country develops economically.

Demographic Transition Theory

Argument that countries pass through a consistent sequence of population patterns linked to the degree of development and ending with a low birth and death rate.

Social Change

Significant alteration over time in behavior patterns and cultural values and norms of a society.

Innovations

The introduction or creation of new ideas, methods, products, or services that bring change or improvement.