Consider a Simple Macro Model with a Constant Price Level

question 117

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.Suppose the level of actual national income is less than desired aggregate expenditure.In this case,

• A)inventories will build up,causing national income to rise.
• B)national income will fall,because desired expenditures are less than actual expenditures.
• C)shortages of goods and reductions in inventories will cause producers to increase output and national income to rise.
• D)national income may increase or decrease,depending on the relative sizes of the average propensity to consume and the average propensity to save.
• E)there will be no change in national income because only actual expenditure is relevant.

---

Definitions:

Goodwill Message

A communication intended to foster positive relations and goodwill between individuals or organizations.

Interpretation

The act of explaining or understanding the meaning of something, particularly in terms of language, text, or actions.

Accuracy

The degree to which information, measurements, or calculations are correct and free from errors.

Nature Of Listening

The nature of listening involves the active process of receiving, interpreting, and responding to verbal and nonverbal messages.