Consider the Simplest Macro Model with Demand-Determined Output,where AE =

question 16

Multiple Choice

Consider the simplest macro model with demand-determined output,where AE = C + I.Suppose actual national income is $900 billion and desired consumption plus desired investment is $890 billion.We can expect that

• A)firms will see a decrease in inventories,and they will respond by increasing output,thereby increasing actual national income.
• B)firms will decrease autonomous investment by $10 billion until equilibrium national income is reached at $890 billion.
• C)firms will increase autonomous investment by $10 billion until equilibrium national income is reached at $900 billion.
• D)actual national income will increase until equilibrium national income is reached at $900 billion.
• E)firms will see an increase in inventories,and they will respond by decreasing output,thereby decreasing actual national income.

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Definitions:

Abdominal Wall

The abdominal wall is comprised of muscles and tissues that enclose the abdominal cavity, supporting and protecting the organs within.

Internal Oblique

A muscle in the abdominal wall that acts to compress the abdomen and flex the spine.

Coccygeus

A small muscle located in the pelvic area, playing a part in supporting the pelvic organs.

Pelvic Floor

The pelvic floor is a group of muscles and ligaments in the pelvic area that support the organs in the pelvis like the bladder, intestines, and, in women, the uterus.