Consider a Simple Macro Model with a Constant Price Level

question 127

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.Using this model,if economists want to estimate the effect of a given change in desired investment on equilibrium national income,they would multiply the change in desired investment by the

• A)average propensity to save.
• B)marginal propensity to save.
• C)equilibrium level of national income.
• D)simple multiplier.
• E)reciprocal of the marginal propensity to spend.

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Definitions:

Face Value

The nominal or original value of a financial instrument as stated by its issuer.

Face Value

The nominal or original value of a security or financial instrument as stated by the issuer.

Note Payable

A written promise to pay a specific sum of money, on demand or at a set time, to the holder of the note.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including principal and any remaining interest.