Consider the Simplest Macroeconomic Model,with a Closed Economy and No

question 147

Multiple Choice

Consider the simplest macroeconomic model,with a closed economy and no government.If we assume that desired investment is autonomous with respect to national income,then the investment function (which graphs desired investment against actual national income) will be

• A)negatively sloped.
• B)positively sloped and relatively steep.
• C)positively sloped and relatively flat.
• D)vertical.
• E)horizontal.

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Definitions:

Pre-tax Income

The income earned by a business before taxes are deducted.

Split-off Point

The stage in a production process where multiple products emerge from a single input, each taking a separate path in the production process thereafter.

Joint Products

Products that are produced simultaneously during the same manufacturing process and from the same raw materials, often with varying values.

Manufacturing Capacity

The maximum amount of products a manufacturing entity can produce over a certain period of time.