Consider a Simple Macro Model with Demand-Determined Output

question 138

Multiple Choice

Consider a simple macro model with demand-determined output.If z is the marginal propensity to spend out of national income,Y is national income and A is autonomous expenditure,then the simple multiplier is equal to

• A)z.
• B)1 - z.
• C)1/z.
• D)1/(1 - z).
• E)Y/(1 - z).

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Going-concern Assumption

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